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Uber drivers are workers, rules Supreme Court

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Aspiring barrister Joshua Xerri looks at the much-talked about employment case

In July 2020 I wrote for the Legal Cheek Journal on Uber’s Supreme Court appeal, detailing the case so far in the various lower courts. Today, the Supreme Court handed down its judgment in that case, unanimously dismissing Uber’s appeal. This follow-up article will go through the various parts of the judgment and think about the implications both for Uber, and further afield for other employers.

The nature of the dispute

The broad and simple summary of the case was, essentially, that Uber didn’t believe the claimants, a group of Uber drivers, were “workers”. The claimants insisted that they were workers, and wanted the various benefits and considerations afforded to those who meet that definition. Most notable of these would be the right to be paid at least the national minimum wage and receive paid leave.

The original employment tribunal decision ruled in favour of the claimants, establishing that they were workers. Their working hours were defined as being when their app was switched on, they were in their working territory, and they were ready to accept trips.

The question which the tribunal considered was whether the drivers fitted the definition of “worker” as laid out by Section 230(3) of the Employment Rights Act 1996. That definition includes individuals who work under a contract “whereby the individual undertakes to do […] personally any work or services for another party to the contract whose status is not […] that of a client or customer of any profession or business undertaking carried on by the individual”. The tribunal found that the drivers satisfied that definition.

This decision was upheld on appeal, first in the employment appeal tribunal, and subsequently in the Court of Appeal. Both appellate courts held that the employment tribunal had correctly defined the relationship between Uber and the claimants.

The issues

The hearing took place over two days on the 21 and 22 July 2020, in front of seven justices of the Supreme Court. The panel of justices reconstituted as six, as Lord Kitchin fell ill and it was uncertain when he would return. The issues for the appeal were, as they had been in the lower courts:

1) Whether the respondents (the drivers) were “workers” providing personal services to Uber; and
2) If they were, what periods constituted their “working time”.

The arguments were livestreamed and covered in detail. Threads detailing each day by employment barristers Jason Braier and Matt Jackson can be found here for day one, and here for day two.

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Uber argued that their role in the equation was as a facilitator, merely connecting passengers with drivers. Any contract which was formed for each ride was therefore solely between driver and passenger, according to Uber. In terms of the 20% which Uber collects for each ride, they argued that this was merely a service charge, and was in line with their role as facilitating agents. They were keen to highlight the fact that their drivers have enormous flexibility in terms of their driving hours, and that this provided further indicators of their status as independent contractors.

Were the drivers ‘workers’?

The court unanimously dismissed Uber’s appeal. They addressed Uber’s arguments about being merely a facilitator or booking agent, stating that there was no factual basis for that assertion. As there were no written contracts between Uber London (the subsidiary of Uber BV who acted as the booking agent in this case), the correct interpretation of the legal relationship had to be drawn from the parties’ conduct. This essentially means looking at the way each party acted, and inferring what that means about the nature of their relationship.

The court defined the relationships as follows: it is Uber with whom the passengers contract, and Uber then engages drivers to transport the passengers who have booked. The court justified its conclusion on the relationship by returning to various findings which the original employment tribunal had made. Firstly, that Uber sets the fare for each ride and the drivers have no say in that figure. The drivers also had no say in the terms on which they perform their services.

Though Uber had been keen to highlight the autonomy of its drivers, the court emphasised the fact that drivers could be penalised if they refused or cancelled too many trips. This itself was a further indicator that the relationship between the parties met the “workers” definition above. There were other penalties and warnings, notably Uber’s famous “rating” system, whereby if a driver fails to maintain a certain rating, they are eventually terminated. On the autonomy point, the court also addressed the fact that Uber drivers are only able to interact with passengers in a very limited way which relates solely to the trip they are making. This does not, at face value, seem like the sort of relationship an “independent contractor” would have with a client.

All of these the court considered as indicators of the drivers being workers, rather than independent contractors. The drivers had little to no control over their terms of their service to passengers, penalties and warnings from Uber, and little in the way of independent autonomy of relationship with the passengers.

Working hours

On the second issue, the court addressed the working time question in just two short paragraphs. They held that all of the lower courts had been correct to find that the three conditions of “working time”, which I outlined above, were met.

Implications for Uber and further afield

What is clear from this case is that Uber have clearly tried to use minutiae and details of contracts to defend themselves from having to pay and protect their workers properly. The court’s approach to this was, to put it informally, say ‘if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck’. Uber will have to come up with the money to pay drivers for the time that they had their app switched on, and so were “workers” who were on the clock. It is not impossible, based on their approach in this case so far, and in other cases in other jurisdictions, that Uber may regard this as being a very narrow issue relating to their practices from a few years ago, and may attempt to resist paying out compensation to a great number of their drivers.

Joshua Xerri is an aspiring barrister.

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Please bear in mind that the authors of many Legal Cheek Journal pieces are at the beginning of their career. We'd be grateful if you could keep your comments constructive.

19 Comments

Anon

Good article, Josh – keep it up!

Mr. I am Concerned about Judicial Activism

This may have been legally correct based on the 1996 Act’s definition of ‘worker’, but why was it left to the Supreme Court to make a judgment on this issue? Why didn’t Parliament intervene before, in order to clarify the legal status of gig economy workers?

Because the reality is that this may have major unintended consequences in terms of rising costs for Uber, Deliver and the like, and therefore fewer jobs available. Surely its being a major policy issue makes it matter for Parliament to decide upon and not the judiciary?

Stephen

*replace all financial agents with facilitators

Anon

The court still has to make a judgment on the historic practice of Uber under the law as it stood at that time. Policy considerations around changing the law would only be prospective anyway.

Anonymous

The outcome is a disgrace. No-one thought they were signing up on a basis they would be entitled to these rights. All this does is help one of the worst of London’s tribes, the self-entitled, Luddite black cab drivers.

Stephen

I don’t necessarily concur. Initially, lets take your argument that, since the drivers were aware of contractual agreement (*which didnt benefit them), they should be liable and responsible. But one must say to what worth is the contract, if through uber superficial shows they are ‘financial agent’ acts on the basis of employee and employer basis,the workers just realised this deviation and held them accountable.Uber had not “factual” supported their “assertion” as a “financial agent” and if they indulged in commerce with this while pretending to be something else is this acceptable and is the initial contract even credible?

Tired of leftists

Once more in English?

name

This reads like sovereign citizen nonsense which has been run through Google Translate several times.

Stephen

I don’t necessarily concur. Initially, lets take your argument that, since the drivers were aware of contractual agreement (*which didnt benefit them), they should be liable and responsible. But one must say to what worth is the contract, if through uber superficial shows they are ‘facilitators’ acts on the basis of employee and employer basis,the workers just realised this deviation and held them accountable.Uber had not “factual” supported their “assertion” as a “independent contractors” and if they indulged in commerce with this while pretending to be something else is this acceptable and is the initial contract even credible?

Anon

That’s not really relevant to whether, legally, they were workers. The lengths Uber went to in order to create a paperwork smokescreen which didn’t stand up for a second against any scrutiny in the FTT shows they were, in truth, aware of that reality as well. Their evidence was laughable at times, trying to run arguments like the drivers being in control of fares because they were permitted under Uber’s terms to accept less (but not more) than the quoted fare in the app…

Realist

Traditional employment law classifications of worker were not established for mass network facilitating platform companies like Uber. Parliament needs to act or they will crush industry and innovation in this area. The gig economy is inherently supposed to be flexible. This will raise costs for customers and lead to Uber cutting back on investment and driver recruitment. The drivers as we saw in California who were against a similar law on classifying them as employees campaigned against the law there. The drivers don’t want it as well and didn’t consider themselves employees. Strangling the golden goose Uber which has created an easy low barrier to entry opportunity for people just trying to temporarily tide their way and stabilise their finances to an extent or get side hustle income, especially immigrants trying to get a foot in the door of the economy in a new country, will do more harm than good.

Uber-Cool Judgment

I haven’t felt this happy about a judgment since Lord Denning was around.

You don't understand how the gig economy works, do you

^

Concerned citizen

The gig economy is toxic, it shouldn’t work as it does.

Boris Johnson

So many Uber social media consultants in the comments!

Anon

How does this square with the semi-recent Deliveroo case which found that riders were self-employed despite the facts being very similar to this one?

Martha

Uber is a big con. They take such a huge cut for simply providing the platform which has given them somewhat of a monopoly. Even more of a racket than London black cabbies. I think there is space for an ethical player in this area.

Paul

All well and good Martha, but I bet you’d sooner order an £8 Uber than dig out £14 for a more ethical option. People like you are all talk. I bet you are the type to always go for the low hanging fruit. Guess what – you are rotten.

Anon

The reason Uber is so good from a consumer’s perspective is because it is so cheap, let’s be honest. I used it for years when I lived in London for exactly that reason (combined with I suppose the ability to call a ride from anywhere at the press of a button). It opens up the taxi as a means of transport for people who would never dream of forking out for a black cab. The reason it was so cheap was at least in part because they didn’t have these sorts of costs factored in to their business model.

Even at the commission rates it retains, it still isn’t sustainably profitable. You can’t run that business in a more “ethical” way, as you put it, without charging more, probably significantly more, at which point somebody is undercutting you because more people care about price than anything else.

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