In a landmark case for UK employment law, Uber drivers are now entitled to receive the National Minimum Wage and holiday pay.
An employment tribunal ruled that they are not self-employed workers, but instead employees of the on-demand taxi app. Uber’s claim that it is just a tech company, and not a taxi service, was rejected.
Nigel Mackay from Leigh Day, the law firm that represented the drivers said: “We are delighted that the Employment Tribunal has found in favour of our clients.
“This judgement acknowledges the central contribution that Uber’s drivers have made to Uber’s successes by confirming that its drivers are not self-employed but they work for Uber as part of the company’s business.”
Despite the loss, Uber remain confident that the decision does not mark the position of the majority of their staff.
Jo Bertram, regional general manager of Northern Europe at Uber commented: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss. The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it.”
The crux of the decision came down to whether the work carried out by Uber drivers can be considered to be that of an independent contractor. Considering the number of hours drivers work, and the control that Uber has over their income, the argument that they are in an employee-employer relationship was upheld.
Tim Goodwin, associate solicitor at Winckworth Sherwood said: “It’s a long-established principle that the courts consider employment status to be a question of ‘substance over form’ – meaning that it’s the reality of the arrangement between the company and the individual that counts, not what you put on the contract.
“It doesn’t really matter whether your boss has called you an employee or a contractor, if the reality is that you are in an employment relationship, which broadly means that your employer has control over your day-to-day activities at work then the reality is that you will be an employee, and entitled to all of the employment rights that go with that status.”
Over the past few months there has been growing discord between such apps and their workers. So what does this decision mean for other companies such as Deliveroo or City Sprint?
Alan Price, director of Peninsula Employment Law said: “Whilst this decision is only at employment tribunal level, and is likely to be appealed by Uber, the case could have large consequences for businesses run on a similar model.
“There is already a related claim supported by a different union in the pipeline against the courier firm City Sprint. Not only could this decision lead to an influx of tribunal claims, but it can lead to large financial penalties for businesses who have not given staff their correct legal rights.”