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23rd February 2021

Uber loses in the Supreme Court

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On 19 February 2021 the Supreme Court (SC) handed down its decision in Uber BV v Aslam & Others, reaching the same conclusion as earlier courts that Uber drivers are ‘workers’ and not self-employed.

The SC emphasized that in determining worker status, the correct approach is to consider the purpose of the legislation (the Employment Rights Act 1996), which is to give protection to vulnerable individuals who are in a subordinate and dependent position in relation to a person or organisation who exercises control over their work. The SC focused on 5 factors that were relevant to that analysis in the present case:

  1. Uber dictates the rate of pay;
  2. Uber dictates the contract terms;
  3. Uber constrains drivers’ freedom to choose when to work once logged into the app;
  4. Uber controls the way in which the service is delivered; and
  5. Uber restricts drivers’ ability to communicate with passengers.

Taking the above into account, the SC held that the contractual documentation between the parties did not match the reality of the work. The SC noted that drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice, the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.

The significance of worker status is huge and means Uber drivers are entitled to claim a minimum wage and holiday pay and Uber will also have to consider eligibility for pensions auto-enrolment. In addition to the financial implications, there are significant compliance costs. Many other rights flow from being classed as a worker, including whistleblowing protection and the right to receive a written statement of terms. The ruling also paves the way for Uber drivers to apply for statutory recognition for collective bargaining purposes.

This decision is a timely reminder for businesses to review arrangements which purport to document self-employment as a tribunal may find that you are not bound by the language of your documentation. Courts and tribunals will look at all the facts of the case when determining worker status.

For more information about any of the items raised in this article please contact a member of the employment law team.