Valerie Lambert, a partner in Hewitsons’ Cambridge Employment Law team, explains what the ongoing case involving taxi-hailing firm Uber and its workers means for businesses operating in the so-called ‘gig economy’

What has become known as the ‘gig economy’ is businesses requiring short-term contracts of freelance work rather than needing permanent jobs to operate.

Many businesses within the gig economy are dependent upon individuals to carry out work for them. The gig economy has been at the forefront of the long-running debate about employment status – in particular, whether these businesses engage individuals as workers on zero-hour contracts or self-employed consultants or freelancers. 

The debate is particularly heated because of the associated rights which workers have in comparison with those who are self-employed, as well as tax liabilities.

On 30 November 2016, the Department for Business Energy & Industrial Strategy (BEIS) commenced an independent review of Employment Practices in the Modern Economy (the Taylor Review), which focused on the rights and responsibilities of workers, as well as on employer freedoms and obligations. The gig economy and the difficulties associated with employment status of individuals working within the gig economy formed the centrepiece of the Taylor Review.

The final report was published on 11 July 2017, and the Work and Pensions Committee and the BEIS Committee are currently carrying out a joint review of the Taylor Review, which commenced on 10 October 2017.

Against this backdrop the Employment Tribunals have faced, and continue to face, a raft of cases about employment status. Perhaps the case which has brought the issues of employment status into sharp focus, is the widely publicised case which was brought against Uber, by some of its taxi drivers, who were aggrieved at not being paid holiday pay and sick pay, amongst other things, and argued that they were workers rather than being self-employed agents of Uber.

The Employment Appeal Tribunal (EAT) upheld the Tribunal’s decision that the taxi drivers were in actual fact workers, rather than self-employment individuals.

The case was noteworthy because the Tribunal disregarded the written contractual documentation in place between Uber and their taxi drivers, which was very clear in establishing self-employed status and supported Uber’s contentions that their drivers were their agents.

The headline points given by the EAT in dismissing Uber’s appeal were:-
(i) The Tribunal had been entitled to reject the characterisation of the relationship between Uber drivers and Uber, in the written contractual documentation, as being determinative of status and was entitled to look at the situation on the ground;
(ii) The Tribunal, having determined the true nature of the bargain between Uber and its drivers, had been entitled to also reject the label of agency used in the written contractual documentation; and
(iii) The Tribunal’s judgment was neither inconsistent nor perverse. In particular, the Tribunal had permissibly concluded that there were obligations upon Uber drivers that they should accept trips offered by Uber and that they should not cancel trips once accepted (there being potential penalties for doing so), together with various obligations when ‘on-duty’, which indicated worker status rather than self-employed status.

Perhaps one of the key points to learn from the Uber case is that the Tribunal will not be constrained to simply accept the contractual documentation in place between the parties.

Rather, the Tribunal will look at the position on the ground and determine what the status of an individual is, whether that be an employee, a worker or a self-employed person. 

Uber have very publicly disagreed with the ruling of the Employment Tribunal and the EAT and will be taking the dispute further, having now submitted a petition direct to the Supreme Court, leapfrogging the Court of Appeal, seeking that the Employment Appeal Tribunal’s case be overturned. 

It remains to be seen whether the Pimlico Plumbers case – another case in which the EAT found that the plumbers were not in fact self-employed but were workers, entitled to various benefits including sick pay and holiday pay – will be heard in tandem with the Uber case.