Uber drivers have won a landmark legal battle which means they are now classed as workers, not self-employed, giving them certain employment rights.
Popular ride-hailing app, Uber, has lost a landmark case in the Supreme Court, which means it must now classify UK drivers on its platform as workers. This entitles workers to certain employment rights, such as national minimum wage and holiday pay. It is a massive win for drivers, as these legal protections were not afforded to them while they were classed as self-employed.
The legal battle began in 2016 when former Uber drivers James Farrar and Yaseen Aslam took Uber to an employment tribunal. After nearly five years of appeals from Uber, the UK’s highest court has had its final say on the case which will have significant and lasting ramifications for Uber, its drivers, and the gig economy more generally.
What was the Uber Supreme Court ruling?
Delivering his judgement last month, Lord Leggatt stated that the Supreme Court had unanimously dismissed Uber’s appeal that it was simply an “intermediary party” for its drivers. The Court also stated that drivers should be considered to be working whenever they are logged onto the app, not just when driving a passenger.
The court considered a number of factors before coming to its judgement. These include:
- Uber set the fare of the trip, meaning they can dictate how much drivers can earn
- Uber set the contract terms, and drivers have no say in them
- Requests for rides are constrained by Uber, which can penalise drivers if they reject too many rides
- Uber monitors its drivers’ service and performance through the star rating
- Uber has the capacity to terminate the relationship with the driver
Uber had long argued that it was a booking agent which hires self-employed contractors that provide transport. Through this process of working Uber is not currently paying 20% VAT on fares. There are suggestions that their whole business model may have to change.
Uber had also argued that, if it were to treat drivers as employees, it would only count the time a passenger was in the car, a key battle it lost in the Supreme Court.
Why were Uber drivers unhappy with Uber?
Unhappy Uber drivers first hit the headlines in 2016 when 19 drivers brought forward a claim against the company, arguing they should be recognised as workers. The drivers argued that they should be entitled to a range of benefits that they did not receive at the time.
One of the claimants, Mr Aslam, stated that Uber’s practices made him leave the trade as he could not make ends meet. While he welcomes the Supreme Court’s decision, he believes it is six years too late. He stated:
It took us six years to establish what we should have got in 2015. Someone somewhere, in the government or the regulator, massively let down these workers, many of whom are in a precarious position.
We are seeing many of our members earning £30 gross a day right now. If we had these rights today, those drivers could at least earn a minimum wage to live on.
The Employment Tribunal at the time decided that the claimants were workers, but that was only the first step in the legal battle. Uber appealed the decision and has fought the claim through various courts ever since. The claim was upheld against Uber in the Employment Appeals Tribunal, the Court of Appeal, and now The Supreme Court.
What does the ruling mean for Uber drivers?
The ruling means that Uber drivers will now be afforded certain legal rights. These legal rights include:
- Getting paid at the least the National Minimum Wage
- Paid holiday benefits
- Protection against unlawful discrimination
- Protection against unlawful deductions from wages
- All workers beginning work on or after 6 April 2020 are entitled to written particulars of employment
Uber drivers who joined the group litigation claim are also potentially in line to receive compensation from the ride-hailing company. This compensation is likely to be based on how much holiday pay a driver should have received historically, and any compensation if they received less than the National Minimum Wage. An employment tribunal will decide how much compensation is to be awarded. After this, similar claims may also be lodged against the company, signaling the potential opening of the floodgates.
In addition to this, Deutsche Bank has estimated that a worst-case scenario for Uber would require them to pay $2.5 billion in VAT back-taxes.
How can Percy Hughes & Roberts help?
Our Head of Employment, Sarah Simcott, boasts years of experience and promises a confidential, friendly and honest approach to all issues within the employment law field. If you have any questions regarding the Uber court case, you can get in touch with us for expert advice. Get in touch with our Wirral Employment Law Lawyer today by calling 0800 781 3894 or by completing the “Get in touch” form on this site.