The Supreme Court Decision relating to the Status of Uber drivers will change the face of the Gig-economy

The unanimous Supreme Court landmark ruling that Uber drivers should be designated as workers and not as “self-employed” provides the drivers with a new raft of basic rights such as paid holiday, rest breaks and to be paid the national minimum wage will have a “knock-on” effect in the entire gig-economy.  Other organisations that function as part of the gig-economy can expect to receive similar claims from the individuals that, up until now, were regarded as self-employed who will now claim the rights accorded to workers.  There are nearly 1,000 similar cases in the queue waiting for the judgment Uber case judgment before taking legal action.

 Lord Leggett, who summarised the judgment, stated that there were five reasons for the decision.

  • Uber controlled the fares charged and did not permit the drivers to set their own prices which a self-employed driver would do.
  • The drivers worked under Uber’s terms and conditions.
  • Uber penalised drivers for cancelling or failing to accept rides.
  • Uber exercises control over the drivers and has a rating system. If a driver falls below a certain level they can be dismissed or face penalties.
  • Uber does not permit the drivers and passengers to have an agreement outside of the Uber system and takes active steps to prevent it.

Lord Leggett stated that Uber drivers work in a situation of “subordination and dependency” with little or no opportunity to increase their skills or improve their income other than taking on more work with Uber.

The case began in 2016 when two drivers, supported by the General Trade Union (GMB), brought a case before the Employment Tribunal on the basis that they were workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998 and not self-employed as Uber insisted.  Following the decision Mick Rix, GMB national officer, stated: “we will now consult with our Uber driver members over their forthcoming compensation claim.”

Daniel Theron, a partner, commented “this is an extremely significant judgment for many businesses in the gig-economy, which is often perceived, rightly or wrongly, as avoiding the legal responsibilities that other businesses are obliged to adhere to” he further said “businesses affected by the judgment will need to conduct a top to bottom review of the terms and conditions of their employment contracts. The perception that a business is attempting to deny their workers basic rights will cause reputational harm which could seriously impact on their viability. It is better to accept the unavoidable additional financial burden.  It may be that some businesses will have to re-think their entire business model”

The arrival of another body blow to businesses already grappling with coronavirus and the aftermath of Brexit cannot be underestimated.  It would be a wise practice for any business to review their fundamental structure to ensure that there are no weak links or bad practice with regard to their employee contracts that could impact on the business, together with their dealings with customers and suppliers.  Organisations that are perceived as exploitive may lose market share, which will be particularly damaging to those who are affected by the consequences of lockdown.  Repairing a damaged reputation is far harder than building a good reputation in the first place. Rivals will be quick to highlight the fact that they treat their workers fairly.

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