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18 February 2019

150: Court of Appeal confirms that Uber drivers are ‘workers’, not self-employed contractors

The Court of Appeal has upheld the decisions of the Employment Tribunal and the Employment Appeal Tribunal (EAT) that Uber drivers are workers, not independent self-employed contractors, and are therefore entitled to the minimum wage and holiday pay.

Uber claims that it is a technology platform providing booking and payment services as agent for the taxi drivers, who are all self-employed, and that a contract is concluded between the driver and passenger for each ride. These arguments were rejected by the Employment Tribunal, which concluded that the complex contractual documentation which purports to create this arrangement does not reflect the reality of Uber’s working relationship with its drivers and can therefore be disregarded. In the Tribunal’s view, the drivers are workers, working for as long as they are in the territory in which they are licensed, signed into the Uber app, and ready and willing to accept bookings. The EAT agreed with this reasoning.

The Court of Appeal, by a majority, has now also upheld the Employment Tribunal’s decision. It ruled that it is not realistic to regard Uber as working ‘for’ the drivers. In reality, Uber runs a transportation business and its drivers are providing the skilled labour needed for the business to deliver its services and earn its profits. Contrary to Uber’s argument, no contract exists between the drivers and their passengers. The Court also agreed that the wording of the standard form documentation contains a ‘high degree of fiction’.

It is worth noting the dissenting view of Lord Justice Underhill that the drivers are self-employed. In his view, the contractual documentation should not be set aside since the relationship argued for by Uber is neither unrealistic nor artificial, as illustrated by the well-recognised model for private hire car businesses where taxis are booked through an intermediary. Lord Underhill also argues that the drivers should only be treated as working from the time that they accept a particular booking, not from when the app is switched on.

Uber has been granted leave to appeal, so it is likely that this case will now be determined by the Supreme Court. The Government has indicated in its recent Good Work Plan that it will legislate to improve the clarity of employment status tests, although it remains to be seen how this can be achieved. In the meantime, in order to minimise the risk of legal action, employers should ensure that their practical working arrangements with independent contractors are consistent with all relevant documentation.

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