The UK’s Supreme Court has ruled that Uber must classify its drivers as workers rather than self-employed.
Following a lengthy legal battle, the ruling could mean that thousands of Uber drivers are set to be entitled to holiday pay and minimum wage.
BBC reported that, following the ruling, the ride-hailing firm could be left facing hefty compensation bills and have wider consequences for the gig economy – something that legal experts have pointed towards.
This news comes after Uber had appealed to the Supreme Court after losing three previous rounds.
Speaking to the BBC, former Uber drivers James Farrar and Yaseen Aslam – who previously won an employment tribunal against Uber in 2016 – said that they were “thrilled” by the ruling.
Aslam, President of the App Drivers & Couriers Union (ADCU), said: "I think it's a massive achievement in a way that we were able to stand up against a giant.
"We didn't give up and we were consistent – no matter what we went through emotionally or physically or financially, we stood our ground.”
In addition to this, Farrar, ADCU’s General Secretary, added: "This is a win-win-win for drivers, passengers and cities. It means Uber now has the correct economic incentives not to oversupply the market with too many vehicles and too many drivers…”
In response to this news, Jamie Heywood, Uber’s Regional General Manager for northern and eastern Europe, told the Guardian: “We respect the court’s decision which focused on a small number of drivers who used the Uber app in 2016. Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.
“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”
‘The Supreme Court has spoken’
Following the news of this ruling, HR Grapevine spoke to several legal experts.
Matt McDonald, a partner who specialises in employment disputes at law firm Shakespeare Martineau, told HR Grapevine that “The Supreme Court has spoken and Uber’s landmark employment battle is over”.
He said: “Having failed to overturn the employment tribunal’s original decision and subsequent appeals, Uber’s drivers are now classed as ‘workers’ and must be given the employment rights which come alongside that.
“The decision will give gig workers some peace of mind and Uber now needs to carefully look at its employment model. The business must now give its drivers many of the rights that other ‘workers’ are entitled to, including holiday pay, minimum wage, and sick pay.
“With this decision, other companies which operate flexible employment models will need to carefully assess their own working practices and adapt them, if necessary,” McDonald added.
‘Landmark victory’
Seb Maley, Qdos CEO, told HR Grapevine that this is a “landmark victory for Uber drivers”, adding that this has the potential to set the example for all gig economy workers.
“The ruling should serve as a stark reminder to businesses that employment status isn’t always clear cut, and that decisions must be made carefully. If a firm engages an individual under the wrong status, the cost – both financially and reputationally – can be massive.
“But while many gig economy workers want greater protection and employment benefits, we shouldn’t assume that all self-employed people need them. There are hundreds of thousands, if not millions of people working for themselves who want to remain entirely independent.”
‘The result isn’t surprising’
Also weighing in on the recent ruling, Alexandra Mizzi, Legal Director at law firm Howard Kennedy, told HR Grapevine that “the result isn’t surprising”.
The legal expert added: “…It underlines the key lesson for gig economy businesses: calling someone self-employed doesn't mask the legal reality.
“Businesses can't have it both ways, if they want to protect their brand through tight quality control, it's more difficult to claim that the individuals providing the service are self-employed. This result will mean that the estimated 45,000 Uber drivers in the UK will benefit from a host of legal protections, including sick pay, holiday pay and whistleblower protections going forward.
“But Uber now also faces a barrage of back payment claims, as well as Employment Tribunal claims for holiday pay, Uber will face a huge liability for unpaid national minimum wage, enforced by HMRC, as the Court also found that drivers were working when logged into the app,” Mizzi added.
CIPD weighs in
Following the news, the CIPD said that the ruling highlights the need for action to address confusion over employment rights and status.
Ben Willmott, Head of Public Policy for the CIPD, commented: “This landmark case has highlighted the ongoing confusion around employment status and the need for greater clarification on this issue for both organisations and individuals.
“The fact this case had to reach the Supreme Court for a final decision to be made shows the very fine distinctions that can exist in determining employment status and associated rights.
“We’re still waiting for the Government to follow through with its pledge to legislate to improve the clarity of the employment status tests and to take action to align the employment status frameworks for the purposes of employment rights and tax. The CIPD believes an effective way to do this would be to abolish worker status altogether which would provide a clearer distinction between self-employment and employed status.
“It is also crucial that the Government takes action to improve the enforcement of employment rights, starting with the publication of its long-awaited response to the consultation on the creation of a single enforcement body for employment rights.”
