More than just a gig – Uber drivers are “workers” says Supreme Court

More than just a gig – Uber drivers are “workers” says Supreme Court

By Jenson Davenport

Whether it be for the daily commute or a lift home from a night out, Uber offers a convenient means of transportation for a variety of trips of varying length. The ride-hailing service has elevated the gig economy in the past decade, expanding into food and package delivery. For the longest time, Uber contended that its drivers are self-employed, and thus not entitled to statutory rights including paid holiday, rest breaks and crucially national minimum wage.

On the 19th February however, the Supreme Court unanimously disagreed in the case of Uber BV and Others v Aslam1 and Others, holding conclusively that Uber drivers are “workers” as described in S230(3) of the Employment Rights Act 1996 and are thus entitled to the statutory benefits that follow; namely holiday pay and minimum wage. The statute provides that a worker is:
“an individual who has entered into or works under (or, where the employment has ceased, worked under) –

a) A contract of employment, or
b) Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker’s contract shall be construed accordingly.”

This case began in 2016 when two drivers – Yaseen Aslam and James Farrar – brought a case to the Employment Tribunal, believing they should be considered “workers” rather than “self-employed.” For the periods in which their claim covered, they asserted that they were “workers” for the purposes of the Employment Rights Act 1996, the Working Time Regulations 1998, and the National Minimum Wage Act 1998, entitling them to the legal protection provided above.

At a preliminary hearing, the Employment Tribunal found that the drivers were workers, and that they were workers whenever they had the Uber app switched on; were within the territory in which they were authorised to work and were able and willing to accept assignments. The case was appealed to both the Employment Appeal Tribunal and the Court of Appeal, where the preliminary decision was upheld. The same is to be said of the Supreme Court’s findings.

Lord Leggatt assented the five principal reasons that Employment Tribunal offered at first instance in paragraphs [94] – [101] of his judgement. To summarise these:

  1. It is Uber who sets the fares at which drivers are permitted to accept; the drivers themselves are not permitted to increase the fare – only to decrease it, offering “no possible benefit to the drivers.”2
  2. The contractual terms on which drivers perform their services are dictated by Uber. They must accept Uber’s standard form of written agreement; the terms on which the drivers transport passengers are also imposed by Uber – the drivers are given no say in this.
  3. Once the drivers log into the Uber app, their choice about whether to accept request rides is constrained by Uber. If they consecutively decline trips, Uber issues them warnings and sanctions temporarily blocking them from accessing the app.
  4. Uber exercises a significant degree of control over the way in which the drivers deliver their services, even vetting the types of cars which a driver may use. The technology which is integral to such service is wholly owned and controlled by Uber, which is used to exercise control over drivers.
  5. Uber restricts communication between passengers and drivers to the minimum necessary to perform the trip, taking active steps to prevent them from establishing a relationship extending beyond one individual ride.

For the reasons given by him, Lord Leggatt concluded that the Employment Tribunal was entitled to find that the claimant drivers were “workers” working for Uber London under “worker’s contracts” within the meaning of the statutory definition in S230(3) of the Employment Rights Act 1996, holding that the relationship between the parties is one of “subordination and dependency”, with the drivers only able to boost their earnings by carrying out more work for the company.

In this landmark case, the verdict is clear. The drivers are workers and thus are entitled to statutory protection. But what does this mean for the future of the gig economy?

There has been mixed reception, on the basis of differing policy factors. Those anxious about the Supreme Court’s decision fear there will be an “opening of the floodgates” and that gig economy organisation should expect a “torrent of claims” from individuals who want the rights that are afforded to a “worker.” But this is looking at the decision from the wrong angle. This case clearly restates the importance of having basic employment protections, undoubtedly influencing future cases that concern the gig economy today. Katie Maguire, an employment partner at Devonshires said that “this landmark ruling has huge implications for those who work for Uber, but also the gig economy generally. It will help improve the lives of around five million people who work within the UK gig economy by granting them workers’ rights.” 3 At the time of the original employment tribunal hearing in 2016, there were around 40,000 Uber drivers operating in the UK, with 30,000 of those operating in the London area. It has been estimated that the consequences of the decision could cost Uber over £100,000,000 in compensation for their workers.

This is clearly the correct direction for the courts to travel. In a world where conventional employer/employee relationships are not necessarily the norm, it is crucial that the courts can adapt to a contemporary employment climate, broadening what once was seen as a “worker” in order to offer greater protection for vulnerable individuals that are paid too little for the work they do and are required to work excessive hours or are subject to any other form of unfair treatment that the law should protect them from.

  1.  [2021] UKSC 5
  2. As Lord Leggatt put it at [94]