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Case and legal updates: The gig economy and Uber

Staying with the topic of the gig economy, the Court of Appeal has given its widely anticipated judgment in the case of Uber BV v Aslam and others [2018]. A quick reminder of the background to this case:

  • Uber presents itself as a software platform (an app) which is used by individuals providing taxi services or, in other words, Uber says it is not taxi firm in the traditional sense.
  • However, Uber does hold a private hire vehicle operator licence.
  • Uber says it acts as agent for the drivers who use the Uber app.
  • The drivers have been regarded as self-employed and the contractual relationship is between the driver and the passenger.

You may recall that a number of Uber drivers challenged the nature of this arrangement in the context of asserting that they were not self-employed but were, in fact, workers. The significance of this difference in status is that workers are entitled by law to receive the national minimum wage and paid annual leave together with the protection from having unlawful deductions made from their wages. Self-employed people have no such rights.

The drivers brought an Employment Tribunal claim for unlawful deduction from wages and failure to pay holiday pay. Two drivers, Mr Aslam and Mr Farrar were chosen as ‘test’ claimants. The basis of the unlawful deduction claim was that the drivers were not paid the national minimum wage for all time that they spent working. They argued that working time was not just the period of time they spent driving the passenger to their destination, working time also included time spent waiting or being available to pick passengers up.

The Employment Tribunal agreed with the drivers and found that the contractual documentation relied upon by Uber did not reflect the reality of the relationship between the company and those drivers who made use of its software. In particular, the drivers were working for Uber once they signed into the app and ready and willing to take bookings for passenger journeys.

The Appeal

Having lost, Uber then appealed that decision to the Employment Appeal Tribunal (EAT). The EAT dismissed Uber’s appeal and upheld the Tribunal’s decision on similar grounds. The EAT was not at all convinced that Uber simply provided software to the driver and was not a taxi operating business.

So Uber then went to the Court of Appeal, again arguing that it provided software to the drivers and was not a taxi operating business. The majority of the Court (2 from 3 judges) dismissed the appeal and were particularly critical of Uber when doing so.

The judgment refers to the ‘artificiality of the contractual documents‘ and ‘there is a high degree of fiction in the wording… of the standard form agreement between [Uber] and each of the drivers.’ This is the takeaway for employers who engage individuals on a self-employed or casual basis. Simply placing a particular label on that relationship or insisting on defined terms may not be sufficient if the individual subsequently argues that they are a worker or even an employee.

The Court of Appeal did give Uber permission to appeal to the Supreme Court and we will update you when further information is known.

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