Glanvilles: The Uber Case
Do you engage employees, workers or self-employed contractors, or do you work under a contract of self-employment?
There have been a number of recent high profile cases in particular involving Uber and Citysprint, which have involved challenges to purported self-employed contracts on the basis that staff are actually engaged as ‘workers’.
Why is it such a big issue?
Workers benefit from a number of rights including the national minimum wage and holiday pay. Self-employed contractors do not benefit from these rights although they do benefit from increased flexibility and potentially more favourable tax treatment.
The Uber drivers had not been paid national minimum wage or holiday pay and were claiming significant sums as a result of alleged underpayment.
The Uber case:
Uber puts taxi drivers in touch with passengers using a technology platform. Uber argued that it was a simple technology platform, and that it was in no way a provider of taxi services. Uber had complex contractual documentation in place which sought to govern the contractual relationship with the drivers and assert that they were self-employed. Uber argued that they did not have significant control over their drivers, a key factor when determining employment status. They believed that their tagline ‘work for yourself, drive when you want, make the money you need’ gave the drivers sufficient flexibility to make them self-employed.
The Employment Tribunal disagreed and stated that Uber’s complex contractual documentation did not correspond with what happened in reality. Uber is in the business of providing taxi services, and engaged the drivers as workers to deliver it services. The drivers were therefore entitled to the national minimum wage and holiday pay.
The Citysprint case, involving a cycle courier, has many similarities with the Uber decision. The Employment Tribunal confirmed that the courier was a worker, rather than being self-employed in business on her own account.
What does this mean for the future?
It is more important than ever that your contractual documents actually reflect what happens in reality. It would be sensible for all businesses to assess the status of their workforce and tighten working arrangements and documentation. The Uber case demonstrates that getting it wrong can be costly.