On 28 October 2016 the Employment Tribunal ruled on the status of Uber drivers and concluded that they were workers and entitled to be paid the minimum wage and annual leave.
The claimants had argued that they were instructed, managed and controlled by Uber. This was borne out in the evidence: refunds were handled and decided upon sometimes without reference to the drivers, drivers had to refrain from speaking negatively about the business in public, there was constant monitoring by Uber and drivers could have their agreements terminated where there were a significant number of customer complaints. Uber’s submission that it was a mosaic of tens of thousands of small businesses linked by a common platform was rejected.
Late last month the Business, Energy and Industrial Strategy select committee launched an inquiry which will, among other things, look at employment status, the self-employed, and those working in the “gig economy” (separately HMRC have announced they will be investing the “gig economy”). Top of the list in the select committee’s terms of reference is whether the definition of a ‘worker’ is sufficiently clear in law. Arguably it is. The Tribunal’s decision was neither a great surprise nor terribly ground-breaking and the concepts of personal service, control and the ability to provide a substitute are not new.
The decision was based significantly on the degree of control exercised by Uber. A business model based on a mosaic of small businesses or sole trader linked by a common platform can be achieved without suffering the same fate as Uber. Businesses that operate an app or other platform which, for example, simply charges self-employed drivers a fee for introducing them to customers is highly unlikely to be affected by this decision. Businesses that are more “hands-on” and impose service-delivery standards will probably find themselves in the same boat – or car – as Uber.
Uber could, of course, choose to relinquish control and find a business model that provides drivers with genuine independence. However, if the priority is to preserve the integrity of the platform, provide a consistent service and protect its brand, then perhaps the National Minimum Wage, holiday pay and others workers’ rights are prices worth paying.
James Tunley / 22nd Nov 2016
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