Chelsea Brooke-Ward discusses: Uber BV and others v Aslam and Others
Chelsea Brooke-WardIn a landmark decision the Supreme Court has ruled that The Central London Employment Tribunal, and the Court of Appeal were correct to find that the Claimant Uber drivers were “workers”, rather than independent contractors. ‘Whether a contract is a ‘worker’s contract’ is a matter of statutory interpretation, not contractual interpretation. That involves taking a purposive approach which, in the employment context, is to protect those who are vulnerable as a result of their subordination to, and dependence upon, another person in relation to their work. In the case of Uber, the employment tribunal’s findings on the relative degree of control exercised by Uber and drivers respectively over the service provided to passengers justified its conclusion that the drivers were workers,’ according to the Supreme Court.
The factual findings supported the tribunal’s decision that the drivers had been working for Uber as part of its business, rather than there being an agency relationship, and this conclusion was also supported by the regulatory requirements operating in the Private Hire Vehicle (PHV) sector. Further, the tribunal and EAT had been entitled to find that the drivers were ‘working’ when they were in the relevant territory with the app switched on and were ready and willing to accept trips.
So, what implications will this Judgment have?
This judgment is of great importance as an explanation by the Supreme Court of how worker status is to be assessed. In summary, it has held that:
1. Whether a contract is a ‘worker’s contract’ is not to be determined by applying ordinary principles of contract law.
2. It is a matter of statutory interpretation, not contractual interpretation.
3. That means having regard to the purpose of the particular provision and interpreting its language, so far as possible, in the way which best gives effect to that purpose.
4. The general purpose of the employment legislation in this case is to protect vulnerable workers from being:
- Paid too little for the work they do
- Required to work excessive hours, or
- Subjected to other forms of unfair treatment
5. The efficacy of such protection would be seriously undermined if the putative employer could, by the way in which the relationship is characterised in the written contract, determine, even prima facie, whether or not the other party is to be classified as a worker.
6. Such an approach is further justified by the fact that all the relevant statutes or statutory regulations conferring rights on workers contain prohibitions against contracting out.
7. In determining whether an individual is a ‘worker’, instead of starting with the written contract, there is no substitute for applying the words of the statute to the facts of the individual case. In doing so it is necessary both to view the facts realistically and to keep in mind the purpose of the legislation.
8. The vulnerabilities of workers which create the need for statutory protection are subordination to, and dependence upon, another person in relation to the work done.
9. A touchstone of such subordination and dependence is (as has long been recognised in employment law) the degree of control exercised by the putative employer over the work or services performed by the individual concerned. The greater the extent of such control, the stronger the case for classifying the individual as a ‘worker’ who is employed under a ‘worker’s contract’.
In response to the judgment Uber is reported to have stated that they believe the judgement is only applicable to a few drivers from 2016 and since then has changed its business model, including giving more control to drivers over how they earn. However, this judgment and the test set out above suggest that amending its contracts in some relatively minor respect is unlikely to have the desired effect given the prohibition of contracting out of statutory rights and the purposive approach encouraged by the Supreme Court which will continue to look at the relationship in practice as oppose to the written terms. Unless Uber changes its business model significantly so that drivers can no longer be said to be “subordinate to, and dependent upon, Uber”, then drivers are still likely to be found workers and entitled to the statutory rights therein.
Uber has over 60,000 drivers in the UK, there is potentially HUGE financial costs to Uber in terms of claims for backpay. In addition to this, this judgment may have opened the floodgates to many more “gig economy claims”. As well as claims by the drivers, there is also the issue of whether HMRC may choose to investigate the non-payment of national minimum wage, PAYE and NI etc.
Moreover, the judgment is colossal for other gig economy platforms such as Deliveroo, Just Eat, Yodel and many more whose riders are in a similar position of subordination to, and dependence upon, the business.
In summary, the judgment holds that the contractual terms between the individual and the business are not determinative because the business is generally in a position to dictate those terms and there is a statutory prohibition on contracting out of employment rights. This is not new to employment law and the Tribunals have always been able to look at the relationship in reality, but it is welcomed clarification that the question to be answered is whether the individual falls within the statutory definition of a ‘worker’ and not what does the contract say?
For further information about Chelsea Brooke–Ward please contact one of her civil clerks:
Senior Civil Clerk – Francine Kirk on 0113 202 8605
Business Development Clerk – Andy Reeves on 0113 213 5252
Talia Webster on 0113 202 8609
Daniel Highfield on 0113 213 5207