Does the recent ET Uber decision necessitate a U-turn on staffing arrangements for gig economy businesses?

The recent Employment Tribunal case Aslam and others v Uber BV and others determined that Uber drivers were not self-employed contractors, as Uber claimed, but rather fell within the statutory definition of “worker” meaning that the drivers were entitled to:- paid holiday; the national minimum wage (£7.20 per hour) and protection against whistle-blowing detriment/dismissal (amongst other things).

Background

Uber’s operation in the UK is significant – in London alone there are approximately 30,000 Uber drivers and 2,000,000 registered Uber users. Uber drivers (supported by the GMB trade union) brought the claim in the ET to establish that they were “workers” (as defined in various statutes). It should be noted that the drivers were not seeking to establish that they were employees with full employment rights.

In summary, Uber’s position was that it is a technology platform facilitating the provision of taxi services, as opposed to being the taxi service provider.  Uber asserted that its drivers were self-employed contractors with the ability to determine when, where and how they worked and who also contracted directly with passengers.

ET Judgment

The ET’s judgment, in which it makes numerous criticisms of Uber, is an interesting read. For example, the ET notes the “remarkable lengths to which Uber has gone in order to compel agreement with its…description of itself and with its analysis of the legal relationships between [Uber’s] two companies, the drivers and the passengers…”. Further, the ET described Uber’s contract documents with drivers as resorting to “fictions” and “twisted language”, which merited scepticism and compared the “grimly loyal evidence” of Uber’s UK Regional General manager as being a case of the “the lady doth protest too much”!

Key findings

The key findings from the ET’s analysis of the working arrangements, leading to its determination that Uber drivers are workers and not self-employed contractors, include:

  • numerous statements in Uber’s marketing materials/communications with drivers, amongst other things, reinforced the position that Uber operates a transportation service and employs drivers to that end;
  • Uber’s contention that it marketed a product range was unreal;
  • the ET’s agreement with a US court decision related to Uber’s US operations, that “Uber does not simply sell software; it sells rides…”;
  • the notion that the Uber in London is a mosaic of 30,000 small businesses linked by a common platform was “faintly ridiculous”;
  • Uber’s contention that there is a binding contract between the drivers and passengers, is “pure fiction” as the reality is that: the driver does not know the passenger’s identity; does not know the destination until pick-up; the destination route is determined by Uber; and the fee is determined by and paid to Uber;
  • Uber’s contention that it worked for the drivers did not stand up to scrutiny given that, amongst other things, Uber: recruits and interviews drivers; controls key information about passengers, sets the journey route and fare and deals with complaints; requires drivers to accept and not cancel trips or it will penalise the driver; imposes various conditions on drivers such what are acceptable vehicles; and uses a rating system which amounts to a performance management arrangement;
  • Uber’s carefully crafted documentation bore no relation to reality, which is that drivers (who provide personal service) were recruited and retained by Uber to enable it to operate its transportation business;
  • the agreement between the parties fell within the scope of being a dependent work relationship and was not an arm’s length contract  between two independent business undertakings;
  • the unreal contract documents (which were detailed, extensive and complex) arose, in part, from an unequal bargaining position between Uber and its drivers and are an example of “the phenomenon of…armies of lawyers contriving documents in their clients’ interests which simply misrepresent the true rights and obligations on both sides”; and
  • Uber could have devised a business model that did not involve it employing drivers.

Conclusion

The case has attracted much attention and commentary. The judgment has repercussions for businesses in the growing UK “gig economy”, which are operating on the premise that they do not have any employees or employment law obligations.  It will be of particular interest and concern to those businesses with similar business models to Uber, who will no doubt be giving careful consideration to their operations and the need to make changes.

However, it must be noted that as a first-tier decision it is not binding on future ETs, the judgment turns on very specific facts and Uber has intimated its intention to appeal. We have not therefore reached the destination of this legal journey…!

Hempsons’ employment team has advised numerous healthcare businesses using app technology and would be happy to assist you with any questions/concerns about the implications of the Uber decision on your business.

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