A recent tribunal case against Uber has shone the spotlight on the importance and consequences of establishing the status of those engaged in work.
What is status in the context of work?
There exists three types of status for the purposes of rights and protection at work.
Employee. An employee has a contract of employment with their employer and the employee agrees to perform the work personally by the control of the employer.
The employer is obliged to provide the employee with work and the employee is obliged to accept it. A contract, whether verbal or in writing, exists, and maps out terms such as pay, hours, and holidays. Employees benefit from important protections such as the right to unfair dismissal protection; notice pay; redundancy pay; and maternity leave.
Worker. A worker is anyone who agrees to carry out work personally for another person, but is not self – employed. Workers include many casuals, including seasonal workers and agency staff.
Workers do not benefit from the same protection as employees, but they are entitled to the National Minimum Wage, holiday pay, and protection by anti-discrimination law.
Self-employed persons are in business on their own account. They do not benefit from the same protection afforded to employees or workers.
The Uber Case
In Mr Y Aslam and others –v- Uber (case number 2202550/2015): two drivers: Mr Farrar and Mr Aslam, on behalf of 19 drivers, successfully argued that they are engaged as workers, rather than working for themselves. They are therefore entitled to protection from legislation such as the National Minimum Wage, and holiday pay.
The Uber business model is to treat drivers who log onto its app as self-employed contractors, and taking a cut of their fares. Uber unsuccessfully argued that its drivers were self-employed and this was preferable to being employed.
Uber claimed it is a technology business rather than a transport business and that their drivers are in business on their own account. The Judge did not accept these arguments and accused Uber of “resorting in its documentation to fictions, twisted language, and even brand new terminology.”
The tribunal further took the unusual approach of quoting Hamlet to describe Ms Bertram’s (Uber’s Regional General Manager for the UK) protestations of defence: “the lady doth protest too much, methinks”.
What should you do?
This is a ground-breaking decision that will affect thousands of individuals in different industries. It also threatens the gig economy where many individuals are often wrongly classified as self-employed.
As an employer, you should analyse the way individuals are engaged to carry out work on your behalf. A good starting point is to make sure the arrangement is set out in writing by a written contractual agreement.
This is only a starting point because tribunals have the ability to look beyond the contractual arrangement if it does not properly reflect what happens in practice.
The Taylor Review is shortly to be released which is an independent review into how employment practices need to change in order to keep pace with modern business models. Part of which should address creating clear legal distinctions between employees, the self-employed and workers.
Uber are appealing the Tribunal’s decision and it is listed to be heard by the Employment Appeal Tribunal on September 27 2017.
Chris Randall is Head of the Employment Law Department at Ringrose Law. He qualified as a Solicitor in 2006 and has always specialised in employment law. He graduated from the University of Lincoln in 2003 with a First Class LLB (Hons) Law Degree and from the University of Leicester in 2009 with a LLM Masters in the Law of Employment Relations.