Taxi For The Supreme Court? Uber Case Final Appeal To Be Heard This Week

The Supreme Court will today hear the final appeal in the Uber drivers case on employment status.

Background

The Claimants in this case are 19 drivers (two of whom, Yaseen Aslam and James Farrar, were selected as lead Claimants) engaged under ‘Partner’ agreements to provide driving services to customers obtained through the Uber smartphone app.

The ‘Partner’ agreements portrayed the drivers as self-employed independent contractors and expressly stated that nothing in the agreement was to create an employment relationship with the driver. This case is about whether the Uber drivers are actually “workers” for the purposes of employment law and therefore entitled to legal rights and protections.

The case was first heard and decided in the drivers’ favour in October 2016. Uber appealed but the Employment Appeal Tribunal (EAT) upheld the original decision in November 2017.

In December 2018, the case went to the Court of Appeal, where the decision was again in the drivers’ favour but it was not unanimous.

Similar cases against Uber have also been pursued in other jurisdictions with France and California both finding that the drivers should receive additional protection.

Significance

There are estimated to be 45,000 Uber drivers in the UK (mostly in London) who this decision is directly relevant to but there is also an estimated 5.5 million people in the UK who work in the gig economy, who may be able to use the principles in this case to claim they should get extra rights too.

As referenced above, the self-employed are not entitled to the legal rights and protections which those classed as “workers” enjoy including the National Minimum Wage, paid holiday and rest breaks under The Working Time Regulations 1998.

Relevant law

Under the Employment Rights Act (ERA) 1996, a ‘worker’ is defined as “as an individual who has entered into or works (or worked) under:

• a contract of employment [limb a], or
• any other contract… 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 [limb b]”

This definition of ‘worker’ can be found in similar forms in the Working Time Regulations 1998, the National Minimum Wage Act 1998 and the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000.

The wider limb of the definition (limb b) consists of two elements:

• The individual must be obliged to do the work personally (i.e. do it himself or herself); and
• The person, for whom the work is done, must not be a client or customer of a business being run by the individual (not in business on their own account).

In considering contractual arrangements, the Employment Tribunal (ET) takes into account the relative bargaining power of the parties, because organisations which are offering work or requiring services to be provided by individuals are frequently in a position to dictate the written terms which the other party has to accept. In the employment context, it may be legitimate to disregard express written terms where they do not describe the true agreement, even in circumstances where it cannot be shown that both parties intended a ‘sham’ (i.e. where it cannot be shown that they had a common intention that those terms should paint a false picture as to the true nature of their respective obligations).

This means an express written right under a contract to substitute another person to do the work needs to be a genuine reflection of the true agreement between the parties, otherwise the reality of the situation will prevail.

Even if an individual is obliged to do work personally, he/she will not be a worker if the other party to the contract (for whom he/she is doing the work) is a client or customer of his/her profession or business undertaking.

Not all those who might properly be described as ‘self-employed’ are engaged in a business undertaking. In distinguishing between employees, workers and those engaged in a business undertaking of their own:

• The Courts must try to determine whether the essence of the relationship is that of:
  • A worker; or
  • An independent contractor who is in business on his own account, even if only in a small way.

• In drawing that distinction, the ‘dominant purpose’ test could in some cases be useful in determining whether the contract was in essence to be located in the employment field, or was a contract between two independent business undertakings.

Although there is no test of universal application, it will often be appropriate and helpful to apply the ‘integration test’, i.e. to consider whether:

• The individual actively markets his/her services as an independent person to the world in general (which would indicate he/she is not a worker); or
• He/she is recruited by the principal to work as an integral part of the principal’s operations (which would indicate he/she is a worker).

Original ET decision

The Employment Judge held that any driver who had the Uber app switched on, was within their working area and was able and willing to accept assignments was a worker for that time.

Uber appealed to the EAT but the appeal was dismissed. Likewise, a majority of Judges in the Court of Appeal also rejected the further appeal.

Supreme Court proceedings

The case is to be heard today and tomorrow (Tuesday 21st and Wednesday 22nd July 2020).  We will update this blog as soon as the judgement is released.

Comment

Employment status is a very important issue.

It is a common misconception that the wording of a contract or agreement is definitive in deciding whether someone is employed, a worker or genuinely self-employed. The ETs can look behind the agreement and will assess the working practices and the reality of the situation.

As for Uber, this can be extremely significant for businesses as they may have miscategorised their relationships and could be exposed to significant costs and liabilities.

For employees, they may have more rights and protections than their documentation suggests.