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Uber's 'worker status' appeal rejected - further appeal highly likely

10 November 2017

The Employment Appeal Tribunal (EAT) has today rejected the appeal in Uber BV and ors v Aslam and ors.

The EAT has upheld the tribunal's high profile decision that drivers engaged by Uber are not self-employed, but instead are 'workers' legally entitled to the national minimum wage, paid annual leave, and whistleblowing protection. The EAT confirm that the tribunal was entitled to reject Uber's arguments that it was not a transport provider, but merely a technology platform providing an app which self-employed drivers could use.

The EAT also approved the tribunal's finding that the amount of control Uber exercises means any driver who has the app switched on, is within their authorised territory, and is able and willing to accept assignments, is working for the purposes of the Working Time Regulations 1998 (WTR) and the National Minimum Wage Act 1998 (NMW).

The appeal

Much of Uber's appeal was based on challenging the tribunal's disregard of the contractual documentation Uber had put in place which purported to prevent a worker relationship existing. In essence, Uber argued that the contractual documentation supported its position that the relationship was one of agent and principal not employer and worker. Uber relied heavily on tax case law to support its contention that the tribunal should not have looked behind the contractual documentation.

Rejecting Uber's argument, the EAT stressed that in the employment law context, tribunals are required to determine the true nature of the parties' bargain, having regard to all the circumstances. The EAT, following the Supreme Court decision in the employment status (rather than tax status) case of Autoclenz v Belcher [2011], reminded us that it is important to have regard to the reality of the situation. As such, the tribunal was entitled to find that the contractual documentation did not reflect the reality and it was entitled to disregard the terms and labels used in the contractual documentation.

The EAT noted that the key question was: "when the drivers are working, who are they working for?" Uber argued that an agency arrangement, whereby it acted as agent in relation to contracts between drivers and passengers, was common in the private hire industry. However, the EAT confirmed the tribunal was entitled to find that this was not the true position in this case with the drivers being key to Uber's business as a transport provider and marketed as such.

Where are we now on 'worker status'?

Earlier this year in Pimlico Plumbers Ltd and anor v Smith, the Court of Appeal upheld the decision of an employment tribunal that a plumber who was self-employed for tax purposes was nevertheless a 'worker' for unpaid holiday pay and unlawful deduction of wages claims and an 'employee' under the extended definition of the Equality Act 2010 for the purposes of a disability discrimination claim.

As in the case of Uber, Pimlico also operates a business model under which operatives are presented to clients of the business as part of the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor, rather than employer and employee or worker.

The judgments in both Uber and Pimlico build on the judgment of the Supreme Court in Clyde and Co LLP and anor v Bates van Winklehof [2014] in that a distinction is to be drawn between:

  1. persons employed under a contract of service (employees);
  2. persons who are self-employed, carrying on a profession or a business undertaking on their own account, and who enter into contracts with clients or customers to provide work or services for them (self-employed contractor); and
  3. persons who are self-employed but provide their services as part of a profession or business undertaking carried on by someone else (workers).

No single factor will be determinative of employment status and a number of factors must be considered. Key factors include 'personal service' on the part of the individual, 'control' over the performance of the service by the employer, and 'mutuality of obligation' between the parties. In the latest cases, integration into the business, business dependency and the degree of financial risk borne by the individual and the opportunity to profit are of increasing importance. As the court stated back in Hall (Inspector of Taxes) v Lorimer [1974], when determining employment status, the process involves "paint[ing] a picture from the accumulation of detail".

And next…

The Supreme Court is due to hear the appeal in the Pimlico Plumbers case on 20 & 21 February 2018. Even before the EAT handed down its judgment in Uber, further appeal was expected. As the Uber hearing concluded, Counsel for Uber suggested that the case might be suitable to be heard at the Supreme Court with the Pimlico Plumbers case in February, leapfrogging the Court of Appeal. It will be for the Supreme Court to grant permission if they agree.


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