A group of Uber drivers who challenged their employment status in the tribunals were 'workers', and so entitled to a minimum wage and paid holidays, the Court of Appeal has confirmed.
However, the decision is unlikely to be the last word on the employment status of so-called 'gig economy' workers, given the dissent of an experienced judge, according to employment law expert Stuart Neilson of Pinsent Masons, the law firm behind Out-Law.com. Uber has also been granted permission to appeal to the UK Supreme Court.
"The decision is in many ways unsurprising: there is now a strong judicial line of cases in which 'gig economy' individuals have been found to be workers, going right up to the Supreme Court's decision in the Pimlico Plumbers case in June," Neilson said.
"However, Lord Justice Underhill - a very experienced judge, who has dealt with a lot of employment law cases - dissented in this case, and leave to appeal has been granted to the Supreme Court. This continues to be a developing area of employment law," he said.
In October 2016, the employment tribunal found that the drivers were 'workers' for the purposes of the 1996 Employment Rights Act (ERA) and not 'independent contractors', as claimed by Uber. In its ruling, the employment tribunal found that the terms of the contract between Uber and the drivers "did not correspond with the reality" of the relationship, meaning that it was free to disregard them. Its ruling was upheld by the Employment Appeal Tribunal (EAT) late last year.
In its judgment, the Court of Appeal said that the employment tribunal was "not only entitled, but correct" to come to the conclusions that it did.
"[I]n the context of alleged employment (whether as employee or worker), (taking into account the relative bargaining power of the parties) the written documentation may not reflect the reality of the relationship," it said. "The parties' actual agreement must be determined by examining all the circumstances, of which the written agreement is only a part."
In the view of the Court of Appeal, there was "a high degree of fiction in the wording" of the contract between Uber and its drivers. Uber "enforces a high degree of control over the drivers" in a way that is consistent with the worker relationship, while the regulatory regime also "strongly reinforces the correctness of the ET's conclusion that the drivers were providing services to Uber".
In his dissenting judgment, Lord Justice Underhill compared the relationship between Uber and its drivers with the traditional minicab model, under which drivers are generally considered to be self-employed. He said that, although Uber's technology was "much more sophisticated", the position taken by the company in this case was "neither unrealistic nor artificial".
The judge then went on to consider the developing law in relation to worker protections and the gig economy. He said that the case for greater legal protections for individuals working in the gig economy was one which required statutory intervention, referring to the government's ongoing programme of employment law reform.
"[My judgment] is based simply on what I believe to be the correct construction of the legislation currently in force," he said. "If on that basis the scope of protection does not go far enough the right answer is to amend the legislation."
"Courts are anxious so far as possible to adapt the common law to changing conditions, but the tools at their disposal are limited, particularly when dealing with statutory definitions ... Abuse of superior bargaining power by the imposition of unreasonable contractual terms is of course a classic area for legislative intervention, and not only in the employment field," he said.
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