Uber drivers are ‘workers’ whilst Deliveroo riders are ‘self-employed’
The question of how we define employment status and the implications for tax and employment rights is one of the biggest issues in modern employment law.
In the case of Uber BV and others v Aslam and others, the Employment Appeal Tribunal has dismissed taxi-hailing app firm Uber’s appeal against the Employment Tribunal’s decision and agreed that its drivers are workers rather than being self-employed. On the other hand, the Central Arbitration Committee (the non-departmental Government body that resolves collective worker disputes) has held that riders for the food delivery company, Deliveroo, are not workers but are self-employed.
These cases demonstrate that employment law in this area is complex and in need of urgent reform.
- In circumstances where individuals are described in contractual documentation as being ‘self-employed’, an Employment Tribunal can disregard this and look to the reality of the working arrangements to assess the true relationship between parties.
- Uber drivers (and others engaged on a similar basis who are subject to a high degree of control and not genuinely in business on their own account) should be treated as workers, thereby giving them additional employment rights and protections.
- Where individuals are subject to less control and have the right to appoint a substitute to undertake work on their behalf, they are more likely to be deemed to be self-employed.
- We await the outcome of further appeal hearings on the issue of employment status, which will undoubtedly influence the development and legal regulation of the U.K. gig economy. It is certainly the case, however, that these decisions are likely to receive a mixed response from those working in the gig economy (many of whom do consider themselves to be self-employed and who enjoy benefiting from more flexible ways of working and reduced self-employed tax treatment).
- Following the recommendations of the Taylor report, the government has recently issued a draft bill which provides for a new “worker by default” status and for companies above a certain size to provide basic employment standards and benefits. The introduction of this new status would mean that the onus would fall on affected companies to prove self-employed status.
- Whilst these cases focus on the gig economy, the impact is much wider. The increased scrutiny of employment status means that any business operating atypical working arrangements will benefit from looking at these more closely to ensure that staff are appropriately classified, and that suitable contractual documentation is in place which reflects the true relationship between parties.
Uber BV and others v Aslam and others
Last year, a number of drivers brought claims in the Employment Tribunal against Uber arguing that they were ‘workers’ rather than being ‘self-employed’. In seeking to persuade the Employment Tribunal that the drivers were self-employed, Uber argued that it operated merely as an online platform through which customers could order a taxi and pay a fare, as opposed to it providing a taxi service. It further argued that the wording of the contractual documentation in place between itself, each driver and the customer was consistent with the drivers being ‘self-employed’.
The Employment Tribunal disagreed with Uber, finding that the reality of the working arrangements rendered the drivers ‘workers’ who had the right to benefit from the normal employment protections granted to such individuals (including, for example, the right to paid annual leave, the national minimum wage and pension contributions).
Uber appealed to the Employment Appeal Tribunal. In dismissing Uber’s appeal and agreeing that the drivers were workers, the Employment Appeal Tribunal held that although Uber drivers could, in theory, refuse work when they were logged onto the Uber app, this could result in their access to the app being blocked and them therefore being unable to work. The reality of the situation was that the drivers were heavily integrated into Uber’s business model, subjected to a high degree of control and not in business on their own account. In particular, they were unable to develop their own business or establish business relationships with customers (because they were not given customer details), they had no ability to negotiate terms with customers and they had to accept Uber’s terms in full (which included being obliged to accept trips offered and being penalised for cancelling trips once accepted).
Uber has lodged an appeal against the Employment Appeal Tribunal’s decision. However, it was refused permission to leapfrog directly to the Supreme Court and so the case will be heard in the Court of Appeal sometime next year. Separately, the Pimlico Plumbers v Smith case will be heard in February 2018 by the Supreme Court and it raises similar issues about worker status.
The Independent Workers Union of Great Britain brought a test case against Deliveroo on behalf of riders in two North London districts, arguing that they were workers and that the union therefore had the right to be recognised for collective bargaining purposes (trade union recognition only applies in respect of employees or workers and not those who are self-employed).
The Central Arbitration Committee (‘the CAC’) held that riders had a genuine right to allocate a substitute to do the work for them within their contracts, and Deliveroo was able to evidence that this right had been exercised by some of its riders. Furthermore, riders were not required to wear Deliveroo’s branded clothing whilst working. In rejecting the current judicial trend, the CAC held that these factors meant that the riders did not work for Deliveroo “personally” and could not be deemed to be workers. It was therefore unable to accept the union’s claim for recognition.
Interestingly, the substitution clause and requirement not to have to wear branded clothing were introduced into Deliveroo’s contracts with riders just 11 days before the CAC hearing, leading many to speculate that the changes were only made so as to manipulate the system and defeat the union’s case.
Separate to the union’s application for recognition, Deliveroo is still awaiting a decision from the Employment Appeal Tribunal on the employment law status of a number of its riders. The CAC decision is not directly binding and so it will be interesting to see how far the Employment Appeal Tribunal considers it relevant.