In October 2016, the Employment Tribunal ruled that two drivers who were employed as gig-economy workers by Uber should have been classed as ‘workers’ under the Employment Rights Act 1996. This landmark ruling confirmed that the firm were then obliged to pay its drivers the national minimum wage, sick pay and holiday pay. This ruling has since caused huge implications for the gig-economy.
It was not surprising that by December 2016 the taxi-app company had attempted to overturn this judgement, arguing that they were a ‘technology firm’ and not a transport business; disputing that its drivers were independently self-employed as they were able to choose where and when they worked.
The judges involved in this case accused Uber of “resorting in its documentation to fictions, twisted language and even brand-new terminology.”
Today, one year on, Uber has failed to overturn this tribunal ruling with the EAT handing down its decision and upholding the initial ruling made in the Employment Tribunal; Uber drivers are ‘workers’ and therefore should qualify for all workers’ rights.
Uber have said that they will appeal this decision too as there is a further two stages in the appeal process – The Court of Appeal and the Supreme Court.
Maria Ludkin of the GMB Union said: “Uber must now face up to its responsibilities and give its workers the rights to which they are entitled.
“GMB urges the company not to waste everyone’s time and money dragging their lost cause to the Supreme Court.”
What does this mean now?
Today’s judgement is likely to cause massive implications as other companies with large self-employed workforces may now face very similar action. It is expected that organisations who have adopted a similar model to Uber will now discover that they owe a substantial amount more to their workers, such as paid annual leave, national minimum wage and sick pay.
Employee? Worker? Self-Employed?
It is crucial to the smooth running of any organisation that an employer is aware of what rights its workers are entitled to and what responsibilities they are legally obliged to abide by.
Employees, workers and self-employed workers enjoy a variety of different legal entitlements, and since many of these rights form the basis of the employment status, the consequences of getting an individual’s employment status wrong should not be underestimated.
When determining an individual’s employment status, an employer will be expected to examine the characteristics that form the employment relationship before coming to a conclusion.
Under the Employment Rights Act 1996 an employee is defined as: “an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.”
Under the same legislation a worker is defined as: “an individual who has entered into or works under (or, where the employment has ceased, worked under)— a contract of employment, or any other contract, whether express or implied.”
How can Employment Law Services (ELS) help?
Employers confused or concerned about the employment status of any of their workers and feel they may be affected by any of the issues raised in this article , contact us today on 0800 612 4772 or request a Free Quote now.