Taxi app Uber has lost its appeal after the Employment Appeal Tribunal confirmed that their drivers are, in fact, workers and should have basic employment law rights.

This is another setback for the gig economy, which has faced significant legal action over employment status in the last few years.

Background

In October 2016, the first high profile case on the gig economy in the UK was put before an Employment Tribunal. At the heart of the case was whether those who work for Uber should be classified as ‘self-employed’ or ‘worker’. The distinction is important because if someone is self-employed, they do not have any significant employment law protections. Workers, however, do enjoy certain rights such as the right to the National Minimum Wage and holiday pay.

Uber maintained that they are a technology company that makes it easier for independent drivers to connect with passengers and deny that they are a taxi company who employ drivers. They insisted that drivers are allowed to be their own boss, are not exclusively tied to working for Uber and are free to work for others.

The Employment Tribunal disagreed. They concluded that drivers who have the Uber app switched on, are in the territory in which they were permitted to work and are able and willing to accept assignments are working for Uber under a ‘worker’ contract.

Appeal

Uber appealed and it was put before the Employment Appeal Tribunal (EAT).

The EAT agreed and said ‘I do not consider it was wrong to hold that a driver would be a worker engaged on working time when in the territory, with the app switched on, and ready and willing to accept trips (“on-duty”, to use Uber’s short-hand)’. The EAT therefore dismissed the appeal.

What next?

Uber has confirmed that they will once again appeal the decision.

We are waiting for the judgement of the Supreme Court in Pimlico Plumbers Ltd and another v Smith. In this case, the Court of Appeal ruled against Pimlico Plumbers, stating that their self-employed contractor was actually a worker and had the right to holiday pay, minimum wage and all the other rights that workers are entitled to.

It will also be interesting to see how the government responds to the Taylor Review published in July 2017. In the Review, it was suggested that the government should provide a clearer outline of what employment status tests should entail. It was put forward that the key principles should be laid down in primary legislation and supported by secondary legislation or guidance.

The Review also argued that the government should keep the distinction between employees, workers and self-employed, but it should rename the category of people who are eligible for worker’s rights but who are not employees as ‘dependent contractors’.

When developing the tests for the ‘dependent contractor’ status, more emphasis should be placed on ‘control’ and less on the ‘requirement to work personally’. It was also suggested that the burden of proof should shift from the employee to the employer; therefore it would be the employer who would need to demonstrate that a particular employment relationship does not exist.

We will keep you updated with the developments as they unfold. If you have any questions about this tricky area of law, seek legal advice at the earliest opportunity.