In what can be seen as yet further disruption to the ‘gig economy,’ the Supreme Court has decided that the claimants in the Uber case (Uber & Ors v Aslam & Ors [2021 UKSC]) are ‘workers,’ not self-employed contractors. The ruling has far-reaching implications for businesses across the country and underscores the importance of correctly establishing a person’s employment status.
Employee, a self-employed contractor, or a worker?
Under UK law, a person can generally be classed as an employee, a self-employed contractor, or a worker. Employees have the most employment rights, while self-employed contractors (or ‘freelancers’) have very little. Workers are a type of middle way category who enjoy some employment rights. These include the right to receive the national minimum wage, paid holiday, statutory rest breaks, protection from discrimination under the Equality Act 2010 and protection for whistle-blowers under the Public Interest Disclosure Act 1998.
Uber argued that it was simply acting as a booking agent for the drivers who in turn were working for themselves. The Supreme Court affirmed the decision of the lower courts that this position was not consistent with the reality of the working relationship. The fact that Uber calculated the fare and did not permit drivers to charge more; that Uber could penalise drivers if they rejected too many trip requests; and that Uber restricted communication between driver and passenger – were among the factors which betrayed less of a business relationship than one of subordination.
Implications for the motor industry?
This has significant implications for any business that utilises significant numbers of self-employed contractors or freelancers. Those who do will need to review the working relationship to ensure that it is truly one of self-employment. Where self-employed contractors or freelancers are deemed in fact to be workers then this will have significant financial implications with regards to National Minimum Wages as well as paid holiday entitlement.
How can I tell?
As confirmed in the Uber case, the more control one party has over the other the more likely that the weaker party will be a Worker. There is no hard and fast checklist and every case will be fact-sensitive, but practical considerations may be:
- Does the individual control the hours they work, or are they set by the business?
- Can they send a substitute to work, or are they required to attend in person?
- Can they negotiate the terms of the contract, or are they supplied with set terms?
It will also need to be remembered that even though both sides may agree that the individual will work as a self-employed person, the Supreme Court in Uber once again confirmed that employment status is determined by the reality of the relationship, not what it may purport to be.
The ruling will be significant for Uber as it opens the way for potentially thousands of national minimum wage and unpaid holiday claims. It also has wider implications for those working right across the UK’s gig economy and further claims from other industries are to be expected.
This advice is general in nature and will need to be tailored to any one particular situation. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Legal Ltd) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.