Taking A Trip To The Supreme Court: Uber appeals ruling on the employment status of its drivers

July 25, 2020

3 min read

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What's going on here?

Uber has taken the ruling of three lower courts that its UK drivers are workers rather than self-employed, independent contractors to the Supreme Court (UKSC) on appeal.

What does this mean?

A group of Uber drivers raised a legal action against the ride-hailing company. They claim that they should be classed as workers, while Uber argues that they are self-employed, independent contractors. The importance of this distinction lies in workers’ entitlement to benefits such as the national minimum wage and holiday pay.

The Central London Employment Tribunal ruled in favour of the drivers and this decision was upheld by both the Employment Appeal Tribunal and the Court of Appeal when Uber appealed. The most important factor in determining an individual’s employment status is the degree of control exerted over them by their employer, with more control being exerted over a worker than an independent contractor. All three courts held that because Uber allocates customers and dictates prices, it exerts sufficient control over its drivers to warrant them having worker status.

Uber is seeking to overturn this decision by appealing to the UKSC. Its appeal is primarily based on the argument that since its drivers have the flexibility to set their own hours, they are not sufficiently controlled by the company to be classed as workers.

What's the big picture effect?

As the highest court in the UK, the case before the UKSC is Uber’s final chance to overturn the ruling. The decision will set an important precedent that will dictate the employment status of Uber drivers, and gig economy workers more generally, and therefore the benefits they are entitled to.

Uber, like many other companies that claim to employ independent contractors rather than workers, will likely suffer financially if the UKSC rules that its drivers are workers. The company will incur increased costs in the future due to workers’ financial entitlements and it will also be liable for back payments of such entitlements where they had previously been wrongly denied. Thousands of Uber drivers could be entitled to an average of £12,000 each, according to law firm Leigh Day.

Uber is a key player in the gig economy, which employs an estimated 4.7m people in the UK. If the UKSC upholds the decision of the lower courts, many of these people will be emboldened to seek worker status and the associated benefits. This will likely mean a more stable and dependable income, greater job security and fairer treatment. On the other hand, some individuals may prefer to be classed as independent contractors for the flexibility that this typically offers. However, Leigh Day has assured those working in the gig economy that they would not lose this flexibility if they were classed as workers: “You will still be able to work when you want to, but you will receive proper pay for the hours that you work”.

The world of work is constantly evolving. Technology and the app-based economy have paved the way for new and disruptive business models and created hundreds of thousands of jobs. The UKSC is not expected to make a ruling for months, but given the lack of legislative clarity surrounding the status and rights of the people in these jobs, the outcome of this appeal will be crucial.

Report written by Isobel Deane

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