The Supreme Court rules that Uber drivers are workers

After more than three years of litigation, the Supreme Court, in a unanimous decision, has now conclusively determined that Uber drivers are “workers”, as opposed to being genuinely self-employed, for the purpose of English employment law.

This is a significant development that will have serious financial consequences for Uber. As workers, Uber drivers will be entitled to receive the national minimum wage and paid holiday. Further claims seeking backpay for benefits such as holiday  that were unpaid while Uber drivers were classed as self-employed are now almost inevitable. Claims against companies  with similar business models to Uber are also likely.

As a result of this decision, Uber drivers are  considered workers from the moment that they switch on their apps to when they finish a shift (or take a break) regardless as to  whether they have a passenger in their car.  Minimum wage and holiday pay will need to be calculated on that basis.

While Uber drivers may appear self-employed in that they can choose their own hours and have high degrees of autonomy, the reality is that Uber exercises a high degree of control over the drivers. Unlike a genuinely self-employed taxi driver, an Uber driver does not contract with their customer. Once an Uber driver logs into the app, they have to accept Uber’s terms. Uber drivers are never given information about their passengers and cannot negotiate with them. Uber drivers also face penalties if they do not accept trips. An Uber driver can be logged out of the app if they reject three consecutive requests.

While there were a number of factors in this decision, a key element in the Supreme Court’s finding was the high level of control that Uber has over its drivers concluding this was  inconsistent with genuine self-employed status.

Importantly , the fact that Uber had gone to great lengths to ensure its contracts described its drivers as self-employed was not decisive. It is a long-established principle that Tribunals will look at the reality of the employment relationship and not simply at the contract. A useful (but not new) lesson from this case is that companies need to ensure  that their contractors are self-employed in reality and not just on paper. As Uber has discovered, while it is tempting to class workers as self-employed, it can be a very expensive mistake.

As workers, Uber drivers will not have the right to bring claims for unfair dismissal and they will not be entitled to redundancy payments, since they are not classed as employees. However, they will be able to bring claims for discrimination and/ or whistleblowing.