Why Uber lost in the Employment Tribunal

 

uber

Uber drivers are not employees and don’t let anyone tell you different.

On the other hand,  in Aslam & others v Uber BV and others the Tribunal did hold that they were ‘workers’.

Being a worker is different from being an employee. Employees have the right not to be unfairly dismissed as well as a bunch of other rights including maternity leave, redundancy pay and the right to request flexible working. To be an employee you have to be engaged under a contract of employment or apprenticeship and there is a whole series of factors to look at – the most important being the extent to which your activities are controlled by the employer. In this case, the huge flexibility that Uber drivers have about when they choose to work  – and the fact that they have to provide and maintain their own car  – would make claiming employee status very difficult. But, as it happens they are not even trying to. Instead, they say that they are workers.

Workers are a sort of hybrid. They can still be classified for tax purposes as self employed but are regarded as ’employed’ for the purposes of some key employment rights such as the right to be paid the minimum wage and rights under the Working Time Regulations (including the right to paid annual leave).  It is these rights that the Uber drivers are claiming, so it is worker status rather than employment status that is key.

What makes you a worker?

To find out whether an individual is a worker or not you basically have to ask three questions:

  • Is the individual working under a contract?
  • is that a contract under which they must personally provide work for the ’employer’?
  • is the ’employer’ best described as a client or customer of any profession or business undertaking being carried out by the individual

For an individual to be a worker the tribunal must answer ‘yes’ to the first two questions and ‘no’ to the third.

So how did the Tribunal reach the conclusion that Uber drivers were ‘workers’? Well, there was never any real doubt that there was a contract between Uber and the drivers and the Tribunal held that when the drivers turned on their Uber App they were working under that contract. Uber argued, however, that the drivers were working directly for the customer and that the app merely facilitated that work. They were not providing work for Uber as such.

Mark Littlewood of the Institute of Economic Affairs agrees with them. He put it this way:

“It’s a mistake to think of Uber as an employer – it is simply a platform that allows drivers and customers to meet and trade. By harnessing the power of the app, drivers are able to work for themselves; they set their own working hours and decide with whom they will do business.

“Uber is no different from the dozens of other sharing platforms, such as Airbnb and eBay. It would be laughable to suppose that those who run their business through eBay should expect sick pay and holiday leave from the tech firm”

It is not entirely clear that Mr Littlewood has actually read the Tribunal’s decision which deals very specifically and in some detail with whether Uber is simply a platform that allows drivers and customers to meet and trade. And it would indeed be laughable to think that those who trade through eBay would be held to be workers based on the Tribunal decision in this case. Nobody who read the decision itself would imagine for a moment that such an outcome was even possible.

Is Uber just a trading platform?

There are in fact two leading cases on (almost) this issue. In Chen Yuen v Royal Hong Kong Golf Club the Privy Council (House of Lords hearing a Commonwealth Case) held that a caddie working on a golf course was actually trading directly with individual golfers and was not working for the golf club itself. More recently in Stringfellows Restaurants Ltd v Quashie the Court of Appeal held that a table-side dancer was engaging directly with customers and that Stringfellows was merely facilitating that by administering the payments and providing a venue.

Uber naturally relied on these cases in arguing that they were merely acting as a ‘platform’ rather than an employer. However, the Tribunal dismissed that argument after a very detailed consideration of the relationship between Uber and its drivers (the possessive pronoun is important here).

A big part of the case comes down to how Uber projects itself to what world. When you use the Uber app as a customer do you really think that you are being put in touch with a driver with a view to negotiating a journey for an agreed price? The Tribunal said that, on the contrary, Uber makes it clear that you are booking a ride with one of ‘their’ drivers. Uber is not just a marketplace or platform, it is a service offered to the public. That service is delivered entirely by Uber drivers and Uber is very fussy about who those drivers are, what kind of car they drive, what route they take to their destination and how much they charge. Drivers are free to work whenever they want – but that is not in itself inconsistent with worker status. In any event, drivers are discouraged from rejecting jobs assigned to them or cancelling jobs where it turns out they don’t like the customer’s destination.

I’m sure if Mark Littlewood were to think about this he would see that there is a big difference between Uber and eBay or Airbnb. With both of those businesses the end product is something owned by individual provider and the actual work done by that provider is incidental to what is being sold to the customer. With Uber, the ride provided by the driver is the very product that Uber markets to its customers

As for Chen Yuen and Quashie, the Tribunal took the view that in those cases – both concerned with employee, rather than worker status – there was a main business operated by the employer (it turns out Stringfellows is actually a restaurant, who knew?) and the service provided by the individual was incidental to that business. In each case there was a real sense in which the business was offering the contractor an opportunity to come on to its premises in order to meet and deal with customers (personally I think that was a rather questionable finding in Quashie, but there you go).

Uber, by contrast, is not just giving customers the opportunity of finding drivers who happen to be in the area and available for hire. It is committed to providing an excellent rider experience – it says so itself – and it can only do that through its drivers. It undertakes to provide that service to its customers and does that by allocating a driver to them. It asks individual drivers to agree to take its customers to their destination and in that sense the drivers are performing work ‘for’ Uber.

Oh, Come Off It!

As for the third question,  the tribunal dismissed as completely unrealistic the idea that drivers are running their own business and Uber is one of their customers or clients. It really is worth reading the decision in full to see the full argument (which is rather elegantly written), but essentially the Tribunal says ‘Oh, come off it!’.

This is a good example of how a Tribunal will cut through the verbiage produced by an employer who is trying to convince everyone that they are not really an employer at all. Simply describing yourself as a software company or a trading platform will not be enough to persuade a Tribunal that that is indeed what you are. It is the reality of the situation that counts and surely the reality of working as an Uber driver is that you, well,  work for Uber.

As for what happens next, I am sure that this case will go to the EAT, the Court of Appeal and perhaps beyond that to the Supreme Court. That process will probably take well over a year, so we will be able to keep arguing about this for some time to come. There is every possibility of the decision being reversed (possibly more than once) but if I were Uber I would be figuring out how to build the calculation of holiday pay and the minimum wage into my driver app.

 

 

 

 

About Darren Newman

Employment law consultant, trainer, writer and anorak
This entry was posted in Employment status, Uncategorized and tagged , , , , . Bookmark the permalink.

3 Responses to Why Uber lost in the Employment Tribunal

  1. cadburycat says:

    The bottom line is,believe it or not, that there are people out there who will happily trade rights for the option of work subject to PAYE.

  2. ukiplocal says:

    It is worth recalling where the idea of a “worker” as distinct from an “employee” came from – you might have guessed; it was the EU.

    • Except that isn’t actually true.

      I’m not sure where the original definition came from – but I can certainly trace the definition back to the Wages Act 1986 (see s.8) – nothing to do with Europe. Europe also had no influence on the original Sex Discrimination Act 1975 which used the same definition of a worker – albeit included in a wider definition of employee.

      It is certainly true that some European rights apply to workers rather than employees – Working Time Directive for example – but that is categorically not where the idea came from.

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