Uber | Firm to give UK drivers holiday pay, minimum wage & pension

Firm to give UK drivers holiday pay, minimum wage & pension

Uber has announced that circa 70,000 drivers in the UK will be treated as workers, meaning that they will be entitled to several basic employment protections – Sky News reported.

The news comes after the ride-hailing firm lost a Supreme Court case last month where it was ruled that it must classify its drivers as workers, rather than self-employed.

This means that they have access to holiday pay and a pension scheme, as well as to be paid at least the minimum wage. According to the publication, these apply from today (March 17, 2021).

Minimum wage is currently £8.72 per hour for those aged 25-years-old and over.

As was reported by the BBC, Uber said in a document including the announcement:

  • It will pay at least the National Living Wage for over-25s, after accepting a trip request and after expenses 

  • All drivers will be paid holiday time based on 12.07% of their earnings. This will be paid out on a fortnightly basis.

  • Automatic enrollment for drivers into a pension plan with contributions from Uber alongside driver contributions

  • Continued free insurance in case of sickness or injury as well as parental payments, which have been in place for all drivers since 2018

  • Drivers are able to choose if, when and where they drive.

Uber says it is an ‘important day’ for UK drivers

The ride-hailing company said that the court ruling had "provided a clearer path forward as to a model that gives drivers the rights of worker status while continuing to let them work flexibly".

Jamie Heywood, Regional General Manager for Northern Eastern Europe at Uber, told Sky News: "This is an important day for drivers in the UK.

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"Uber drivers will receive an earnings guarantee, holiday pay and a pension, and will retain the flexibility they currently value.

"Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives," Heywood added.

‘We will check the small print of this offer’

This announcement attracted the attention of Frances O’Grady, General Secretary at the Trades Union Congress (TUC) who took to Twitter writing: “Gig economy workers deserve dignity at work and the same basic rights as everyone else."

While she said it appears to be a ‘step in the right direction’, the General Secretary said that the TUC will “read the small print carefully”.

Legal expert weighs in

Following this announcement, HR Grapevine spoke to several legal experts.

Rebecca Thornley-Gibson, Partner at DMH Stallard, told HR Grapevine that Uber’s announcement “should not be a surprise”.

"Following last month’s Supreme Court ruling that their drivers are workers and entitled to these remuneration components, Uber was left with no choice but to meet its legal obligations,” she explained.

Despite this, the legal expert said that what the ride-hailing firm has not yet announced is how it will deal with “past failures to make these payments and when drivers will receive these monies”.

“As that will be a significant cost to Uber and involve complex calculations, those fighting on behalf on the drivers will continue to be involved in discussions that should result in settling historic underpayments…” she added.

Separately, Philip Richardson, Partner and Head of Employment Law at Stephenson’s told HR Grapevine that the decision by Uber is a “very welcome milestone”, not just for their workers but also for the gig economy as a whole.

“The judgment of the Supreme Court last month not only forced the hand of Uber but should also act as a wake-up call for many other companies that still use this employment model,” Richardson aded.

‘Uber is still fighting’

Jonathan Chamberlain, Employment Partner at law firm Gowling WLG, said that the ride-hailing firm has 'accepted that it lost but it is still fighting'.

He said: “They are not committing to paying drivers when they turn the app on, which is what the Supreme Court said they should do, but only when they're booked to a customer. 

“Uber has always said that if a driver is free to work for another app, Uber shouldn't have to pay them. But, in 2016, which is the timeframe the judgment applies to, the courts said that didn't matter because there were no other apps for drivers in London to use to any meaningful extent. Ironically, in 2021, if Uber has more competition, it may owe their drivers less," Chamberlain added.

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