Member Article

Employment law implications for workers in the gig economy

Almost immediately after losing their operating licence in London on safety and security grounds, Uber were once again in the news as their appeal regarding the employment status of two of their drivers has been heard in the Employment Appeal Tribunal (EAT).

Uber, one of the giants of the so-called ‘gig economy’ within the UK, has faced a number of controversies across the globe. One such legal battle involved a tribunal claim brought by two drivers who argued that Uber had wrongly classified their employment status, was the highest profile tribunal claim in a number of claims brought against companies with similar operating methods. The drivers were successful at the employment tribunal and it was judged that they were workers, rather than self-employed contractors as argued by Uber. The outcome of the original tribunal had serious implications for Uber; it meant that the drivers would be entitled to certain employment rights. Those rights include the right to national minimum or living wage for hours worked, paid holidays, rest breaks and pension rights if eligible. Uber would, in theory, have to make arrangements to provide these rights to all drivers across the country, with 30,000 located in London alone, or face a significant number of tribunal claims. In addition, their workers would also be entitled to receive back pay in many circumstances.

Uber have now argued at the EAT that they are not a “gig economy” employer but are, in contrast, acting in an identical way to traditional minicab firms with self-employed drivers. In these circumstances, the minicab firm acts as the driver’s agent by referring the passenger to the driver and receiving payment for this. This does not create an employment relationship and the driver does not become a worker or employee.

The decision of the EAT will have far-ranging implications, whichever way they decide. If they agree with Uber and apply the traditional minicab firm arrangement to their business model, their drivers will be reclassified as self-employed. Not only will Uber drivers lose their newly established worker rights, other so-called “gig economy” employers may also apply this approach to their business models. Most notably, Addison Lee, a minicab company who lost a claim against two drivers claiming to be workers, may apply this approach to their similar model.

On the other hand, if the EAT uphold the original tribunal decision that these drivers are workers, this will bind tribunals considering “gig economy” cases on similar facts. It will also reaffirm the worker rights available to Uber drivers and, due to the high profile of this case, may encourage other gig economy workers to bring tribunal claims to determine their rights. Now that employment tribunal fees have been abolished, it is arguably easier than ever for “gig economy” workers to challenge their status and their pay under their current arrangements. Many gig economy companies may now wish to consider their model, how the tests apply and carry out an internal review of worker rights.

The Uber decision is unlikely to stop at this level and the EAT decision may be subject to ongoing appeals. It is also worth noting that the Pimlico plumber case regarding the employment status of a plumber has also been granted leave to appeal to the Supreme Court as an “arguable point of law of the greatest public importance”. This decision will look at a similar application of the status tests, with regards to a highly paid plumber, and will become one of the leading cases in this area.

This was posted in Bdaily's Members' News section by Kate Palmer .