Imogen Reseigh, senior associate, Trowers & Hamlins, said: ‘This decision of the Supreme Court was not unexpected given other recent employment status cases but is hugely important.
‘Not only is this a significant decision for Uber, it is going to have far reaching consequences for the gig economy business model. It also begs the question whether our current laws on employment status are fit for purpose given modern ways of working.
‘It is clear that the courts will look beyond contracts and will disregard the label of “self employment” if this does not reflect the practical reality.’
The case, Uber BV & Ors v Aslam & Ors [2021] UKSC 6, will now return to the employment tribunal, which will determine the level of compensation due about 40,000 workers affected.
Yvonne Gallagher, partner at Harbottle & Lewis, said: ‘In finding that Uber drivers are workers, the Supreme Court has focussed expressly on the vulnerability of those working in insecure roles with no real ability to negotiate their terms.
‘This is a very rights-focussed approach which looks at underlying realities and the courts will not be distracted by provisions in contracts which do not reflect the reality of the working relationship. Expressly excluding these rights will not work and nor will characterising the relationship as being between a service business and its client, where that is not the reality.’
Gallagher said the judgment provides extra rights for Uber drivers such as paid leave and minimum wage for time spent working with the Uber app active, including time spent waiting for jobs in quieter periods. Drivers would be entitled to be enrolled in a pension scheme and receive a minimum contribution set at approximately 3% of earnings.
‘The decision will have implications for many working relationships which do not fall within traditional employment structures such as commission-only sales arrangements and app based roles in which individuals are required to indicate that they are immediately available to work, with no guarantee that their services will be used,’ she said.
According to Katie Maguire, employment partner, Devonshires, the decision is likely to grant worker’s rights to about five million people who work in the gig economy.
Beverley Sunderland, managing director, Crossland Employment Solicitors, said the Court reached its decision because Uber controls the rate of pay, the contractual terms were imposed not negotiated, drivers were penalised if they failed to achieve a certain level of rides, Uber used a ratings system to control delivery and Uber restricted communications between driver and passenger.
‘The drivers are subordinates and dependent on Uber to the extent they cannot improve or develop personally either professionally or entrepreneurially and the only thing available to them is working harder to earn more money,’ she said.
‘This decision by the most senior court in the country seems to set a different tone, really focussing on the need for protection of those who are tightly controlled by their masters and who do not have the ability to improve themselves and develop and their only way of increasing their earning power is to work harder. This change of emphasis is likely to catch most in the gig economy and there are many other cases in the process of appeal.’
