Employment Status: Can Uber drivers help steer employers in the right direction?

Uber, the multinational app that allows users to hail a ride almost immediately, has caused a lot of controversy over the past couple of years and that continues this month as it faces legal action in the employment tribunal (ET). GMB union is representing a group of Uber drivers (the Claimants) who assert that they should be considered ‘workers’ and should therefore entitled to the protections and rights that come with this status. Uber (the Respondent) on the other hand, considers the drivers to be ‘self-employed contractors’ and as such they have very little protection awarded to them by UK employment law.

The Claimants argue that the Respondent pays the driver’s wages, expects them to carry out the job personally and controls certain aspect of their jobs, constituting an employer-worker relationship. As such, the Claimants should be entitled to the rights that come with the status of a worker, which includes the right to national minimum wage, holiday pay and statutory sick pay. If the ET rules in favour of the Claimants the Respondent could be liable for compensation to cover back payment of national minimum wage etc.

The tribunal has adjourned and is due to deliver its decision in the upcoming weeks. Nonetheless the case is a stark reminder of the need for employers to be aware of their obligations and how these can change depending on the status of a staff member.  Uber is not the only business to come under scrutiny recently, other apps such as Deliveroo ,which offers cyclists the opportunity to work for them in a similar capacity, has also been pulled-up on employment law matters and there is likely to be many more. With new business models like these emerging that offer maximum flexibility for workers it is attractive to users who might not be aware that, as a result, they are missing out on the protections and rights awarded to workers and employees.  

Many new businesses, and even some older ones, are not aware of the differences between a self-employed contractor, a worker and an employee, which could land them with an employment claim further down the line. In addition, individuals need to be aware that just because they are classified as one thing in their employment contract, does not necessarily mean it is legally correct.

The three different statuses come with different statutory protections so it is imperative that employers are correctly classifying their staff. In brief, to determine which category a person falls into, three factors will need to be considered. Firstly, whether the person is required to provide the service personally; secondly, whether the employer is obliged to provide the person with work which the person is then obliged to undertake; and finally, whether the employee has the power to control how, where and when the person carries out the work. If all three of these factors are applicable then the person will be considered an employee and will be entitled to all of the rights available under UK employment law. However, if the first and second factors are applicable but there is not sufficient control over the person, they will be considered a worker.

A worker falls in between a self employed contractor and an employee. They are not entitled to all the protections awarded to an employee but are covered by important regulations such as the Working Time Regulations and National Minimum Wage Regulations. Ultimately, the Claimants in the above case are trying to demonstrate that they are workers as they are not carrying out their own business but have a degree of control over when, where and how they work.

In order to assist both employees and employers to identify their correct status the Government has launched an online tool which can be found at https://www.gov.uk/guidance/employment-status-indicator.

There are still many job roles where an employee’s status can be hard to identify and this is likely to grow as new business models, such as Uber, develop. Emma Kemp, Employment Solicitor, explains “Employers often use different ways of employing staff based on what their business requires and likewise individuals may have an idea of what status would best suit them. Self employed status is by no means irrelevant nor is it a bad option for individuals who may be seeking greater flexibility, however both parties need to be clear from the outset what category the individual falls into. Even though the Uber case has not reached a decision yet, it shows that an employment tribunal will look at the intentions, actions and behaviours of both parties to ultimately determine the employment status of an individual, regardless of what is suggested by an employer”.

For tailored advice or further information on any of the points mentioned above please contact the employment team at Warner Goodman LLP.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.