The EAT has dismissed Uber’s appeal against the employment tribunal’s decision that its drivers are ‘workers’ within the meaning of S.230(3)(b) of the Employment Rights Act 1996 (ERA 1996) and the equivalent definitions in the National Minimum Wage Act 1998 (NMWA 1998) and the Working Time Regulations 1998 (WTR 1998). The EAT held that the employment tribunal was entitled to reject the characterisation by Uber of its business in the written contractual documentation and to look at the situation as a whole.
There are three levels of employment status in the UK: self-employed, worker and employee. Self-employed individuals are not entitled to the same employment protections as workers and employees, and so, for example, are not entitled to protection from unlawful deductions from wages, entitlement to receive the national minimum wage, and entitlement to paid annual leave. A number of Uber drivers had brought claims before the employment tribunal claiming that they were in fact workers and were therefore entitled to those rights. The employment tribunal held that the individuals were workers. The tribunal had held that the contractual documentation characterising Uber’s business model did not reflect the true nature of the working arrangements. Uber appealed to the EAT.
The EAT dismissed the appeal, holding that the tribunal was entitled to disregard the contractual documentation which purported to suggest that Uber was acting as agent for the individuals who were acting on their own account and were self-employed. The tribunal had rejected this argument because, looking at the circumstances as a whole it was entitled to disregard the terms and labels in the written agreements. The tribunal was entitled to take into account, among other things, the scale of the business, and rejected the notion of Uber as ‘a mosaic of 30,000 small businesses linked by a common platform’. In considering the factual reality of the situation the tribunal could also consider that the drivers were integrated in the Uber business; they were excluded from establishing a business relationship with passengers; the drivers worked on the understanding that Uber would indemnify them for bad debts; and the drivers were subjected to various controls by Uber.
The EAT also considered when time would start to run for the purposes of calculating the working time under the WTR 1998 and the NMWA 1998. The tribunal had found that the drivers should be treated as working when they had the app switched on, they were within the territory in which they were authorised to drive, and were able and willing to accept assignments. However, Uber argued that the tribunal should have taken into account that, even while signed into the app, drivers were at liberty to take on or refuse work and could even work for others, including other private hire vehicle operators. The EAT appreciated that this was a particularly difficult point. However, based on the facts of the particular case, which required drivers to accept at least 80% of trip requests when signed in, this meant that once in the territory with the app switched on, drivers were available to Uber and at its disposal. The EAT did go on to say that the assessment of the drivers status and time in between the acceptance of individual trips will however be a matter of fact and degree. As such, if it is genuinely the case that drivers are able to hold themselves out as at the disposal of other operators when waiting for a trip then the same analysis may not apply.
The Taylor Review of Modern Working Practices which was published on 11 July considered when workers under the gig economy should be entitled to the National Minimum Wage. It noted that working time should be sensibly calculated and that “no individual should be expecting to be paid for all that the time that he or she has the app open (regardless of whether or not they are seeking work).” The report suggested that the Government could adapt the piece rate legislation to enable platforms to compensate workers based on output. However, this would also include a requirement for the company to provide information to the worker about the level of work they could expect to receive at that time. It will be interesting to see how this develops as, if individuals continue to obtain worker status, this difficult aspect of the case will need further clarification.
Uber has indicated that it intends to appeal and we will keep you updated.