Uber has been granted the right to appeal to the Employment Appeals Tribunal (EAT) against a landmark legal decision which ruled that its drivers qualify for basic employment rights.
The US-based company, which operates a smartphone app allowing passengers to hail licensed cars, will look to overturn last year’s ruling, which was seen as a major blow for UK companies in the so-called ‘gig economy’.
Last October a Tribunal ruled that Uber’s drivers should be classed as ‘workers’, entitled to rights such as sick pay and the minimum wage. See our previous e-bulletin from 3rd November here
Uber argued that its drivers, who provide their own vehicles and set their working hours themselves, are ‘self-employed contractors’. The company says its app is merely a platform for linking drivers with passengers or customers.
Last year’s landmark ruling, sought by two Uber drivers, supported by the GMB Union, was significant for millions of workers in the gig economy. If Uber loses this appeal, due to be heard on 27 and 28 September 2017, they may be forced to make substantial payouts to approximately 40,000 drivers in the UK and continue to bear the ongoing costs for holiday, sick and pension payments. This would clearly have a major impact on other gig economy companies and ways of working.
Comment
No surprises here really — Uber was always going to appeal, mainly because of the financial implications of having to pay historic and future national minimum wage, holiday pay and pension contributions for so many drivers. The initial decision was very fact-specific, and it will be interesting to see if the EAT agree whether the Uber app was simply a ‘platform’, as argued by Uber themselves, or whether the company has true direction, supervision and control over the drivers’ activities, like that of an employer.
The outcome of the EAT decision will be binding (unlike the previous decision) and will provide further authority on how courts will address ‘status’ challenges in the gig economy. As demonstrated in this case, Tribunals will consider the nature of the relationship in practice rather than the contents of any signed or agreed contracts, which may portray the relationship in a different light to the situation in reality.
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