UK Supreme Court finds Uber drivers are workers and not independent contractors
The Supreme Court of the United Kingdom in Uber BV and others v Aslam and others [2021] UKSC 5 unanimously decided that Uber drivers are workers and not independent contractors. The matter will now return to the Employment Tribunal to decide the substantive claims, which concern holiday pay, rest breaks and minimum wage.
Various drivers first brought claims against Uber back in 2016 for the national minimum wage, holiday pay and detrimental treatment for whistleblowing. The issue was that they had to be classified as ‘workers’ for the purpose of the relevant legislation and it was Uber’s contention that they were independent contractors and thus, could not take action against them.
Uber is a technology platform that puts customers seeking a taxi in touch with drivers who own cars and are willing to provide rides. Once the booking is confirmed, the driver and passenger can contact one another through the platform. It would appear that everything that happens in the process, other than conversations between the driver and passenger, is controlled by the platform. Even the fare is calculated by the platform, based on GPS data from the driver’s phone.
Uber argued that it was a mere agent for the drivers however lower courts, and also the Supreme Court, took issue with the significant control that Uber exercises over the drivers including the fact that it would deactivate a driver’s access to the platform if customer ratings fell below an acceptable level. It also told drivers that they should log out of the platform if they did not wish to carry passengers.
The Employment Tribunal and The Employment Appeal Tribunal found that drivers were in reality incorporated into the Uber business of providing transport services, rather than working in business on their own account. The tribunals also found that drivers were workers the moment they accepted trips.
The majority of the Court of Appeal also held that drivers were workers considering the significant control exercised by Uber over them. The court was not convinced by Uber’s argument that the written contractual terms reflected that Uber was a mere agent for the drivers as this did not reflect the practical reality of the relationship between them. Lord Justice Underhill in dissent, however, agreed with Uber that the terms of the agreement made it clear that the drivers were not Uber’s workers.
The Supreme Court unanimously concurred with the lower courts and ruled that Uber drivers are workers and not independent contractors. The agency argument raised by Uber was entirely dismissed by the court; they were unconvinced that an agency model complied with the licensing regime, but decided that, in any event, the drivers had never actually authorised Uber to act as their agent.
A previous Supreme Court judgment, Autoclenz Ltd v Belcher [2011] UKSC 41, was discussed and endorsed by the court. In that case, the court concluded that car valeters were workers, despite contractual documentation suggesting otherwise. Accordingly, employment status cases should not be determined by applying ordinary principles of contract law. This reflects the fact that in an employment context, the parties frequently have unequal bargaining power.
The Supreme Court observed that the general purpose of employment legislation governing working hours and minimum wage is to protect vulnerable workers. Therefore, it wouldn’t be just for a business to use its written contracts to determine who qualifies for protection. The court, therefore, concluded on the point that the approach regarding protection must be one of “statutory interpretation, not contractual interpretation.”
Apart from concluding that Uber drivers are in fact workers and not independent contractors, the Supreme Court also pointed out its agreement with the Court of Appeal that the drivers were “working” whenever they were logged in to the platform. This conclusion was supported by Uber’s tendency to log out drivers who failed to accept incoming bookings. For the court, this pointed to there being a penalty for drivers who failed to comply with an obligation to accept a minimum amount of work when logged in.
The matter will now return to the Employment Tribunal to decide the substantive claims, which concern holiday pay, rest breaks and minimum wage. It’s important to note that like other recent cases, this case is specific to its own facts and other claims concerning people working in the gig economy will not necessarily be decided in the same way.
Click here to read the full decision.
Click here to read the Autoclenz decision.