Thousands of workers employed in the gig economy stand to gain from the decision by the Supreme Court that Uber drivers are ‘workers’ for Uber and not ‘self employed contractors’ as Uber had maintained in the face of all the evidence and through three tiers of the court system.
In UK employment law, people doing work for another can either be employees, or independent contractors, or they can occupy an intermediate category – that of a ‘worker’. The drivers were represented by GMB and the Independent Workers of Great Britain (IWGB).
Employee, worker or contractor?
Employees have a contract of employment and also employment rights such as the right not to be unfairly dismissed and the right to a redundancy payment. An employee must a) do the work themselves (they cannot send someone else to do it); b) they must be offered work and they have a duty to do it; and c) the employer must exert a definite level of control over their work and how they do it.
An independent contractor will satisfy none of these three conditions. For instance, a plumber who comes to fix your tap is not your employee or worker; they are a contractor.
Workers will meet some but not all of the conditions. Uber claimed that the drivers were independent contractors, who contracted with the passengers to transport them, while the drivers insisted that they were workers. Workers have the right to the minimum wage while they are working, annual leave, and are covered by the Working Time Regulations.
The Uber house rules
The Uber drivers did have the right to refuse work at any time of their choice, and it was not in dispute that they did have to transport the passengers themselves in their own car. But the biggest question in the case was about the degree of direction and control exercised by Uber over their drivers, and the minimum obligation owed by the drivers.
Uber does actually exert very close control over the drivers. The payment is set by Uber; Uber takes 20% of each fare; Uber sets the drivers terms unilaterally; Uber decides whether or not to accept a particular booking. The drivers do not know the passengers identity until they pick them up, and they never know the passengers’ surnames; Uber will log a driver off the App if they refuse too many jobs; and Uber will manage a drivers performance if their rating falls below 4.4, and they will even (in their words) ‘deactivate’ the driver if no improvement is seen.
Uber’s defence was that they had a ‘really cleverly drafted contract’, which said that the drivers do not work for Uber, and that the actual contract was between passenger and driver, with Uber a mere intermediary. The Court took a very thorough look at UK employment law in this area, considering other cases of bogus self employment such as car valeters at a firm called Autoclenz, and a case involving Rossendale College and its lecturers, before deciding that the reality is that Uber drivers are workers not contractors, whatever the contract says.
Uber’s lawyers quoted all sorts of case law involving minicab firms, caddies on a golf course in Hong Kong, a dancer at Stringfellows, you name it. But the court decided that these were not actually relevant to the Uber drivers. The court concluded that the only reasonable conclusion was that Uber was a transportation business, that the drivers work for it and not for thousands of individual passengers.
The Court of Appeal’s devastating judgement
If anything, the Court of Appeal were even more scathing about Uber than the higher Supreme Court, referring to their documents as “Fictions, with twisted language and even brand new terminology” used to disguise the “simple case that the organisation runs a transportation business and employs the drivers to that end”. The Appeal Court described Uber’s case that the riders employed the drivers as “unreal” and stated that the contract they have forced on the drivers does “not correspond to the reality”. It tries to say that each driver “enters into a binding contract with a person they do not know (and will never know), who does not know (and will never know), the drivers identity, to undertake a journey to a destination not told to him until the journey begins…the absurdity of the propositions speaks for itself”.
The Court of Appeal found 12 reasons why the drivers were workers and not independent contractors:
1. Uber has sole discretion to accept or refuse bookings, not the driver
2. Uber interviews and recruits the drivers
3. Only Uber know the passenger’s surname and contact details
4. Uber requires drivers to accept and not cancel a certain proportion of trips
5. Uber sets the route and investigates if it is not followed
6. Uber sets the fare
7. Uber sets the type of vehicles and controls the drivers duties
8. Uber rates the drivers performance and “deactivates” them if they do not reach the right level
9. Uber had a guaranteed earnings scheme (now discontinued)
10. Uber accepts the risk of losses
11. Uber handles passenger complaints
12. Uber can amend the drivers’ terms without agreement
For all those reasons the Court of Appeal decided that it was “entirely satisfied that the drivers are recruited and retained by Uber to enable it to operate its transportation business” and that the contract had been crafted by “armies of lawyers contriving documents in their clients’ interests which simply misrepresent the true rights and obligations on both sides”. It is absolutely devastating to Uber and their lawyers.
Implications and lessons
The Uber drivers are ‘workers’ and not self employed contractors, whatever torturous wording Uber’s lawyers have put into the contract. Therefore they have the right to the minimum wage, the working time regulations and whistleblower rights
The court also decided that they are ‘working’ in the legal sense whenever they have the Uber App on, not just when driving a passenger
This has huge implications across the economy, not just minicab firms. A prime example would be construction where hundreds of thousands of workers have been forced into bogus self employment; but also such practices have spread into banking and finance, and even to managers in social care.
Bogus self employment has been spreading like a cancer and costs working class people huge sums of money – they have to pay their own National Insurance (NI) and pensions, and have no holiday pay. It also costs the Treasury a fortune as the employers evade their duty to pay NI. It is creating a financial time bomb of impoverished pensioners.
The workers were represented by two unions – the giant and bureaucratic GMB and the smaller, independent IWGB – in many ways at opposite ends of the spectrum of trade unions in Britain today. But without union backing the drivers would have had no chance of challenging Uber. The company’s strategy was clearly to use its deep pockets to price the drivers out of justice by appealing to ever higher, and more expensive courts. They lost at each level.
Although we would always give the first place to industrial strength and action, the legal avenue should not be written off. Unions have scored some notable legal victories in recent years – Unison on Employment Tribunal fees, the FBU on public sector pensions, Unite on picketing in lockdown and also inclusion of overtime in holiday pay. And in a way, an ability to mount successful legal challenges is only possible on a base of strong workplace organisation.
However the law is slow. The Uber drivers began this journey in 2016, five years ago. The Autoclenz car valeters case ran from 2007 to 2011. It is far better, quicker and less expensive to use industrial means – collective grievance, overtime bans and ultimately strike action – than to embark on an expensive and uncertain legal process. But not everyone has this luxury.
The employers, and their friends in government, will not leave matters here. Watch out for all sorts of exemptions in Rishi Sunak’s new Freeports. In order to defend this victory and to fight against bogus self-employment in other areas, the trade union movement needs to seriously put resources into organising the currently unorganised layers in the gig economy. This means big recruitment campaigns and flexible organising, dealing with all the issues of an atomised workforce. Recent strikes by Deliveroo workers show this is possible when organised in a serious way.
This needs to be linked to a wider struggle to ensure workers are not forced to pay for the economic crisis, which began over 10 years ago but has now been deepened. The casualisation of the workforce was a reaction by the bosses to the 2008 crisis, making it easier to sack workers or to save money by not paying sick pay or pensions. Attacks on terms and conditions are being attempted in both the public and private sectors, with the excuse of the coronavirus pandemic, as well as mass job losses being on the cards. This victory should give confidence to the union movement to fight for decent jobs, pay and conditions for all workers.
Useful cases for union reps
· Autoclenzy v. Belcher 2011
· Allonby vs. Accrington and Rossendale College 2004
· Mingeley v Pennock (t/a Amber Cars) [2004]
· Cheng Yuen v Royal Hong Kong Golf Club [1998]
· Quashie v Stringfellow Restaurants Ltd [2012]
· Carmichael v National Power plc [1999]
