Supreme Court has confirmed Uber drivers are workers

In Uber BV and others v Aslam and others, one of the most highly anticipated judgments of the year, the Supreme Court has unanimously dismissed Uber's appeal and has confirmed that Uber drivers are workers.

What has happened to date?

The case was first brought to the Employment Tribunal in 2016 by two Uber drivers, Yaseen Aslam and James Farrer. Uber sought to maintain that it only acts as an intermediary between passengers who engage directly with drivers as independent contractors. However, the Employment Tribunal found that the Uber drivers were "workers", and therefore entitled to certain protections under the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998 (such as holiday pay and rest breaks).

This decision was upheld by the Employment Appeals Tribunal and then later by the Court of Appeal.

What did the Supreme Court decide?

The Supreme Court upheld the decision of the Court of Appeal. It clarified that the determination of 'worker' status is a question of statutory, rather than contractual interpretation. This requires a consideration of the purpose of the legislation. In the case of section 230(3) of the Employment Rights Act 1996 this is to protect vulnerable individual who are in a subordinate and dependent position in relation to an organisation who exercises control over their work, and to prevent employers from seeking to contract out of their statutory obligations.

The Supreme Court highlighted 5 key factors underpinning its finding that Uber drivers are properly classified as 'workers':

1. Where a ride is booked through the Uber app, it is Uber that decides the fare for that ride, and therefore Uber who dictates the pay that an individual receives.

2. Contract terms are imposed by Uber and Uber drivers have no say on these terms.

3. When a driver is logged into the Uber app the driver's ability to choose whether or not to accept jobs is limited. Drivers receive a penalty if too many jobs are declined or cancelled.

4. Uber has significant control over the way that services are delivered, in particular the use of a rating system to rate drivers from 1 - 5.

5. Uber restricts communications between drivers and passengers to those through the app. Uber drivers are not capable of extending a relationship with passengers beyond the individual ride.

The Supreme Court also noted that for the purposes of calculating working time, this is not limited to the time when a driver is driving a passenger to their destination, but should also include the time when a driver is logged into the app and is ready and willing to take a trip.

Lord George Leggatt commented that "Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill".

What does this mean for Uber drivers?

The ruling means that Uber drivers (or at least those who worked under the 2016 business model) are entitled to basic employment protections, including minimum wage and holiday pay. Those Uber drivers will be entitled to claim minimum wage based on their entire working day. The drivers will also be able to claim for 5.6 weeks' paid annual leave each year.

Co-lead claimant James Farrar commented that: "This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers.... Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom. The reality has been illegally low pay, dangerously long hours and intense digital surveillance."

Although Uber has consistently sought to argue that the ruling only applies to a small group of drivers, Leigh Day (who represented some of the Uber drivers involved in the case) stated that it will be claiming compensation on behalf of thousands of drivers who have joined its claim, and that many of these claims could be worth thousands of pounds in compensation.

What does this mean for Uber?

This ruling will have significant consequences for Uber. In the short term, the case will be remitted to the Employment Tribunal to determine compensation for the drivers involved. In the longer term, Uber may face a significant class action and its business model may be jeopardized. The decision is also likely to have broader ramifications for the gig-economy. Although no two businesses are exactly the same, the decision will make it much harder for companies engaging people via digital platforms to assert that those individuals are self-employed, irrespective of what is stated in their contractual terms.

In Uber's response to the judgment, Jamie Heywood commented that since the case started in 2016 there have been "significant changes to our business" and that "we are committed to doing more and will consult with every active driver across the UK to understand the changes they want to see." Uber has also recently submitted comments in a white paper to the European Commission ahead of a consultation on potential European legislation to protect gig economy workers.