Having now had the long-awaited judgement from the Supreme Court in the case of Uber vs Aslam and others, in this two-part blog, we look firstly at the history of this and other similar claims, and in part two, we consider what it might mean for gig economy workers moving forwards.
Part one: Uber vs Aslam, and similar cases
To recap on the case, two self-employed Uber taxi drivers (Aslam and Farrar) brought a claim in 2016 against Uber in the Employment Tribunal (ET) for ‘worker rights’ – the right to earn the National Minimum Wage, to be entitled to paid holiday and to benefit from the employment protections afforded to workers. Both drivers were members of the GMB Union. Uber argued that the drivers were independent contractors. The claimants won their case and Uber appealed the decision. The Employment Appeal Tribunal (EAT) dismissed the appeal and Uber took it to the Court of Appeal. In a majority verdict, the Court of Appeal upheld the EAT decision but offered Uber the opportunity to appeal the decision in the Supreme Court. The case was heard in July 2020 and the judgement was published on 19th February 2021, unanimously upholding the finding that the drivers were workers.
This is one case among many recent similar cases – Pimlico Plumbers vs Smith followed a very similar path and also resulted in a judgement from the Supreme Court that the claimant was a worker. We have also seen successful claims for worker status against City Sprint Couriers and Deliveroo, among others. In 2018, DPD made a decision to class all of their delivery drivers as workers following the death of one of their drivers, which forced them to reassess the way that they operated.
In 2016, Prime Minister Theresa May commissioned an independent review of employment practices in the modern economy. The review was led by Matthew Taylor, Chief Executive of the Royal Society of Arts and focussed on how employment practices needed to change to reflect the way that business operates today. The result, in 2017, was a 116-page report labelled ‘Good Work’, which set out seven steps towards ‘fair and decent work’.
In December 2018, the Government published the Good Work Plan (GWP), introducing reforms to employment practice taking account of the recommendations put forward in the Taylor Report. The focus was particularly on maintaining or enhancing worker rights following Brexit and looking at the alignment of employment status and tax status. HMRC currently only recognises employees and the self-employed; they do not recognise the ‘worker’ status that exists within employment law.
So, given the history of cases and the legislative changes, what does this mean for gig economy workers moving forwards?
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Part two: Implications for the gig-economy
When considering whether a ‘contractor’ is genuinely self-employed, the Courts apply a number of tests, some of the key ones being:
- Is there mutuality of obligation under the contract?
- Is personal service required or can the person providing the service send a substitute to complete the work?
- How much direction and control does the engager have over the contractor?
One of the key facts that has been reinforced by recent cases is the need to have a good contract for services in place, which accurately reflects the relationship between the parties. Merely stating that there is no employment relationship is not sufficient – especially when, in reality, the key tests cannot be met.
This may lead ultimately to companies having to make a decision about precisely what degree of control they really need to have and whether they can accommodate the unfettered right for the contractor to send a substitute.
Each situation needs to be assessed individually. A one size fits all approach to a contract for services may not work. In situations where the engager needs to assert a high level of control or where it is simply not possible to allow substitution (e.g. where advance security clearance is needed), then it is best to consider them as a dependent contractor: a self employed person who is entitled to be paid the national minimum wage and to accrue paid holiday.
Where companies are confident that they can meet the key tests then independent contractor status can be applied. In these situations, it is also worth checking that the contractor has all the appropriate insurances in place for the service they will be providing to you, and that they are financially accountable for what they do – i.e. if they get it wrong, they put it right at their own cost.
It remains to be seen whether Uber will amend the contracts in place for all of their drivers or whether they will wait for a potential class action from all the remaining drivers in the UK if they choose to only apply worker rights to the two successful claimants.
Another factor which will also need to be considered shortly is IR35 (off-payroll working). Legislation introducing new requirements on the private sector was due to be introduced last year but was postponed and now becomes effective from April 2021. This places the onus on the engager to determine the status of off-payroll workers.
We’ll be publishing another blog on this shortly.
If you need support with determining status for your contractors or you want to ensure that you have the right documentation in place which accurately reflects your relationship, we’d love to help. Get in touch – visit our contact page.
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