On 19 February 2021 the Supreme Court have handed down the unanimous decision in Uber BV & Others v Aslam & Others. The judgement is considered to be a key landmark decision for companies operating in the ‘Gig Economy’.
The case started its legal journey in July 2016 in the Employment Tribunals and has been hard fought progressing through to the Employment Appeal Tribunal, the Court of Appeal and then reaching a final determination in the Supreme Court. Given the high profile nature of Uber itself, the case has remained in the headlines ever since it was first presented.
The key battleground fought over is whether Uber drivers were ‘workers’ or, as Uber claimed, ‘independent contractors’.
Workers are entitled to receiving the National Minimum Wage, Holiday Pay, Working Time and all the other entitlements which workers are able to benefit from under English Employment Law such as Sick and Maternity/Paternity Pay.
The key issue in determining whether someone is genuinely self-employed, a worker or an employee is the question of control.
In the case of Uber, the Supreme Court found that once a driver switches on the ‘app’ and the drivers make themselves available for work, a number of key factors come into play in deciding their status as follows:
Uber decides which passenger and destination to allocate each driver;
Uber sets the fares and the drivers have no say as to what can be charged;
Uber decides on the route to be taken;
Uber controls the relationship between the driver and passenger; and
All Uber drivers sign up to standard terms and conditions which were imposed on them without any negotiation
Uber uses a structure in which a Dutch holding company holds the intellectual property and two English subsidiaries hold the drivers operating licenses; one for London and one outside of the capital city.
The documentation signed up by the drivers in essence described them as ‘customers’ and was drafted to make the relationship look like a ‘commercial’ one.
The Supreme Court however looked past the written agreements put in place by Uber and instead considered the reality of the relationship as between the drivers, Uber and the passengers and found on a unanimous basis that the drivers were indeed workers.
The judgement entitles Uber drivers to make substantial financial claims against the companies and no doubt these will be pursued in the coming months. In order to avoid expensive litigation and consequent claims for damages, it is vital that some key lessons are learnt, as set out below.
However disruptive or revolutionary a new technology is, the courts will always look at the reality of the relationships between the ‘worker’ and a likely ‘employer’. An app is simply a new, more convenient and efficient way of delivering a service but that is all it is. It does not alter the fact that drivers are taking passengers from one geographical spot to another and charging fares for it.
Furthermore, artificially constructed paperwork drafted by lawyers will not protect a business from the cold hard facts and it is what is actually happening that matters, rather than the ideal that the documentation is trying to portray. The contents of signed agreements are taken into account by judges but are not in themselves the final word on the matter as they will push past the written word to look at the underlying relationships and what is happening on the ground.
If you want a relationship with someone to be that of an independent contractor then they have to be given the commercial freedom to make a profit or indeed a loss and genuinely run a business in their own account.
We would strongly advise clients to avoid being blinded by their novel tech solutions, go back to basics, review their commercial relationships and test whether or not the people working with them are or could be classed as workers. The cost of getting it wrong is very substantial as Uber will no doubt be finding out in the months to come.
