Uber Drivers are Workers

By Lauren Fisher
Published February 2021

The Supreme Court unanimously dismisses Uber’s appeal, establishing that Uber drivers are ‘workers’ as defined under the Employment Rights Act 1996.

Background:

Uber is a technology company which enables drivers to connect with and provide lifts to passengers, through the use of its app. Since its creation, Uber has always treated its drivers as independent contractors, as opposed to workers or employees. This meant that the drivers were not given any protection under the Employment Rights Act. A group of Uber drivers sought to establish their status as ‘workers’, to claim rights such as a right to holiday pay and the national minimum wage.

Issues:

To be a worker under the Employment Rights Act, an individual must have a contract to personally perform work or services for another party which is not a client or customer of the individual. The issue for the Uber drivers was that the written contract with Uber specified that there was no working relationship.

The decision:

Despite the fact that the written contract stated there was no working relationship, the Supreme Court unanimously found that Uber drivers are workers under the Employment Rights Act. The court came to this decision by considering the purpose of the employment legislation, which is to protect individuals who are subordinate to a party that exercises control over their work. This relationship was inferred from the conduct of Uber and its drivers.

The court suggested that the most significant factors pointing to a working relationship included:

• Uber dictated the drivers’ pay by setting a fare through the app which could not be changed;
• Uber imposed the contract terms, without giving drivers a say;
• Uber constrained drivers’ choices about whether to accept lifts by imposing penalties on drivers who rejected too many;
• Uber restricts communications between drivers and passengers to the minimum needed to perform the lift;
• Uber exercises control over the way in which drivers deliver services by monitoring performance through rating systems, and terminating relationships with drivers with low ratings.

It was held that the entire time the drivers were logged into the Uber app within their licensed territory constituted ‘working time’ under employment legislation, rather than only the time when drivers were actually driving passengers. This is because the drivers are still at Uber’s disposal during this time.

Implications of the decision:

The decision is likely to have implications not only for Uber’s specific operating model, but also for the wider gig economy. Organisations with similar operating models to Uber may be required to treat individuals who were previously thought to be independent contractors as ‘workers’. This means individuals may be entitled to protection under the Employment Rights Act. These organisations should seek advice if in doubt about what this decision means for them.

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