"I particularly valued your drafting of the various letters we sent to the employee . . ."
Uber drivers are workers
The Supreme Court highlights five examples from the employment tribunal decision of the working arrangements between Uber and the drivers that clearly demonstrate how they are workers working under a contract to perform personal service. The Court unanimously held that none of the drivers are in business.
The five key examples are:
- Uber dictated to the driver the fare to be charged to the passenger. The driver did not have any ability to decide what to charge.
- The contractual terms between Uber and the driver imposed strict controls and methods of operating. These gave the drivers no freedom to decide how to work.
- Once logged onto the Uber app, drivers had little ability to turn down trips and if they refused too many they were penalised by being logged out of the app for 10 minutes thereby preventing them from working.
- Uber’s strict controls over the drivers relating to the delivery of the service included a rating system for each ride. If a driver did not maintain a certain rate he or she would be prevented from using the Uber app.
- Uber restricted the drivers’ ability to have meaningful contact with the passenger. Uber kept this contact to the minimum possible to complete the trip.
Taken together the above examples illustrate the drivers were workers for the purposes of the National Minimum Wage and for paid statutory holiday pay.
The Supreme Court also held that drivers’ working time started from when they logged onto the Uber app; not when they were driving only on a trip.
What does this Supreme Court decision mean for employers?
The reality is that Uber drivers were under the control and direction of the company. Drivers had limited scope to operate independently outwith the stringent and detailed rules imposed on them. Personally I think it right that in a country like the United kingdom workers and society benefit when minimum pay levels are observed and workers can afford to take paid annual leave. It is nevertheless important to emphasise that the use of self-employed subcontractors will remain a legitimate and important option for many companies. The clever bit is making sure that the contractual arrangements are fit for purpose and reflect the true nature of the relationship between the subcontractor and the client, so to speak. The subcontractor must be able to operate in a truly self-employed way with minimal restrictions imposed by the company. I continue to act for a number of companies who use self-employed subcontractors. For some of these they may need to implement changes to reflect today’s decision. For others, after no doubt a proper review, the existing arrangements can remain.
How safe is your business model?
You may not be running a global transportation business like Uber, but this case should encourage you to check your contractual and working arrangements with your self-employed contractors or other atypical workers.
Call or email Simon Quantrill or Katherine Sheerin to discuss how they can help you avoid ending up falling foul of this Uber decision.
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