Uber Loses Supreme Court Case On ‘Workers’ Rights

The Supreme Court handed down its decision in the high profile case of Uber BV and others v Aslam and others  this morning. The Court has upheld an Employment Tribunal’s decision that Uber drivers are ‘workers’ for the purpose of rights under the Employment Rights Act 1996, Working Time Regulations 1998 and National Minimum Wage Act 1998.

Supreme Court decision in Uber BV and others v Aslam and others

Background

This case has been going through the Courts since 2016 and this Supreme Court decision was Uber’s final shot at trying to establish that their drivers should not be classed as ‘workers’ but should be classed as self-employed.

The view of the Courts to date (Employment Tribunal, Employment Appeal Tribunal and Court of Appeal) was that the drivers were not self-employed but were engaged to provide personal service while they had the Uber app switched on and were in their designated territory ready to accept a job.

Uber has argued throughout the litigation that they are merely a booking agent facilitating a direct contract between the drivers and the passengers and taking a 20% fee for that service and the driver’s use of their App. Their written agreements with drivers reflect this intention and they said that drivers can accept or reject jobs as they like and that they are not undertaking services until they commence a journey to collect a passenger.

Lord Leggatt, delivering a summary of the Supreme Court judgment, said that the original Employment Tribunal decision was right and he referred to five key points which supported the finding:

  1. When a ride is booked, Uber set the fare and they dictate from that how much the driver is paid.
  2. The working contract terms are imposed by Uber – the driver has no say or negotiation in the operating contract
  3. Once logged in to the App, the choice by the driver on whether they accept or reject a job is still constrained by Uber – they are monitored and penalised if they refuse too many jobs, ultimately being logged out of the app for a period of time before they can then accept jobs.
  4. Uber has control over how the services are delivered – passengers are asked to rate the drivers from one to five after a job and if average ratings are not maintained by the drivers they are given warnings and may be logged out of the app permanently.
  5. Uber actively restricts communications between the driver and passenger to prevent a relationship being built. The transport service is built and delivered by Uber – drivers are subordinate and not able to develop their business and offering in the same way a genuinely self-employed person could. If they want to make more money they cannot up their rates, they just have to do more hours.

The level of control exerted by Uber over the drivers was simply inconsistent with a genuine self-employed arrangement.

Lord Leggatt in his summary also highlighted that the purpose of the relevant employment law legislation in this context is to protect vulnerable workers from being paid too little for the work that they do and being subject to excessive working hours. Uber cannot deviate from the legislation and contract out of the statutory protection by way of written agreement with the drivers.

The Court also made the specific point that working time in this case was not limited to driving time – it includes time spent by drivers when they are logged in to the app in their territory awaiting work. Uber’s own welcome pack for drivers referred to their being logged on as ‘being on duty’ – a suggestion that they are indeed expected to be fully available from that point. This is a difficult concept as, in theory, Uber argued strongly on this point, noting that this paved the way for drivers to be logged in to various digital work based apps awaiting work and potentially be accruing the right to receive National Minimum Wage from more than one employer. However, they were unable to provide any evidence to support that their drivers were able to hold themselves out as available to other providers at the same time in London.

Comment

This long awaited final decision will have quite big ramifications for those companies engaging people via digital platforms. Lots of businesses now operate similar business models and have really thrived in recent years, particularly companies like Deliveroo and UberEats during the pandemic who engage drivers to deliver food. Each case will always turn on its specific facts here but tens of thousands of Uber drivers are set to now be entitled to benefit from national minimum wage and holiday pay if the business model remains as it is.

Uber Supreme Court

How Nelsons can help

Melanie Morton is a Legal Director in our expert Employment Law team.

If you would like any advice in relation to the subjects discussed in this article, please contact Melanie or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online enquiry form.