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Uber: A Look Back at The Supreme Court Ruling and its Significance for Employers
March 29, 2021
The case began in 2016 when a number of Uber drivers brought claims against Uber for payment of the national minimum wage and holiday pay. The drivers also alleged that they had suffered detrimental treatment for whistleblowing. However, in order to proceed with these claims, the drivers were required to prove that they were workers or employees, as opposed to self-employed contractors, as Uber claimed.
When the case reached the Supreme Court, there were two key questions to be addressed:
Did the drivers work for Uber under workers’ contracts or did they provide services as independent contractors?
If the drivers are workers, what qualified as “working time” for the drivers?
Firstly, the Supreme Court held that drivers were workers, not self-employed contractors.
In reaching this decision, the Supreme Court dismissed Uber’s argument that it was merely a booking agent for drivers which allows drivers to enter into a separate contract with each passenger. This argument was rejected on the basis that there was no evidence to show that drivers conferred authority on Uber to act as their agent.
Uber also relied on the wording of the written contract between themselves and the drivers which said that Uber was an “independent company” and that the drivers were the “customer” (of Uber) who received access to the app in return for a service fee. However, the Supreme Court did not accept that this reflected the reality of the situation.
It was held that although the written contract should not be ignored, there is no legal presumption that a contractual document contains all the parties’ rights and obligations towards each other. They also confirmed that a contractual document does not represent the parties’ true agreement just because an individual has signed it.
In addition to these factors, the Supreme Court also reviewed Uber’s business model and determined that the control exercised by Uber over drivers was indicative that they were workers, not independent contractors.
Examples of the control which Uber exercises over the drivers include:
Determining the fare for the drivers and therefore how much the drivers get paid
Approving the type of car that can be used
Using customer ratings of drivers to manage the performance of a driver
In answering the second question, the Supreme Court confirmed that “working time” includes any time a driver is logged on and is ready and willing to accept rides. This was evidenced by Uber’s own terms, which described logging into the Uber app as “going on duty”.
For Uber drivers, the ruling is significant as it will undoubtedly improve their working conditions. As workers, they will be entitled to 5.6 weeks of paid annual leave per year, sick pay and, crucially, the right receive at least the statutory minimum wage for the entirety of the period that they are logged into the app and are ready and willing to accept trips.
However, the wider implication of this ruling on the rest of the gig economy is currently unknown. Whilst this judgment may indicate the direction that the courts are going when defining a worker, it does not automatically mean that those working in the gig economy are workers. It is worth remembering that this decision was very fact-specific and that the Supreme Court put great emphasis on the way Uber operated when making its decision.
Businesses within the gig economy should look to review any terms or working arrangements to assess the level of risk of worker status claims.
Ensure that any documentation in place reflects the reality of the working arrangements.
If you identify any risks, consider what steps you need to take to protect your business.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
