Uber taxi drivers’ successful challenge is a blow to the gig economy

2016-11-07 Jennifer Renney posted:

Most of us will have read with interest the case of taxi drivers versus the taxi service phenomena known as Uber. The Central London Employment Tribunal decided on 28th October that the claimant drivers were not self-employed contractors engaged by Uber but in fact workers for Uber for the purposes of the national minimum wage, holiday pay and whistleblowing protection.

The analysis of the Employment Tribunal Judge on the employment status issue is extremely interesting and can be summarised as follows: any driver who (a) has the Uber App switched on, (b) is within the territory in which he or she is authorised to work, and (c) is able and willing to accept assignments, is working for Uber under a 'worker' contract.

The Employment Judge also confirmed that 'working time' for the purpose of calculating the drivers' holiday pay was when the above-mentioned conditions were satisfied, which means that time when a driver who does not actually have a passenger but is ready and able to accept one is still working time for calculating holiday pay purposes.

This case is likely to have significant ramifications and although it is likely to be appealed, for now Uber drivers will be able to claim that they are entitled to be paid no less than the national minimum wage or living wage, as well as being entitled to claim holiday pay and whistleblowing protection.

If HMRC also decide to challenge the status of the drivers for tax purposes, Uber could also become liable for pension contributions under the automatic enrolment workplace pension provisions if a claim were to be made that the drivers were qualifying workers for those purposes.

It remains to be seen whether Uber will appeal the decision to the Employment Appeal Tribunal, or change its current business model, for example by possibly reducing the amount of control it has over its drivers.

Other businesses which operate similarly in the so-called 'gig' economy, such a courier and delivery companies, will be watching developments in this case with interest. A hearing in the cycle courier case of Citysprint is due to take place later this month, and other firms like Deliveroo can probably also expect to be challenged.

We are employment specialists providing bespoke and tailored advice to employers and employees. If you seek clarification about your employment status or that of your staff, give us a ring on 01225 632240 or at info@renneyandco.com

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