16 Nov 2016

The Uber problem that could become.....even more uber

Few will have missed the landmark judgement two weeks ago in the UK Employment Tribunal in relation to the status of drivers working for Uber, the taxi firm.  The court decided that they were ‘workers’, which was bad enough news for the company, but it could get worse.
It used to be so simple in the old days.  You were either an independent contractor or alternatively, an employee.  However, with significant amounts of employment law coming our way via the EU, a new term has increasingly found its way into the language of UK law.  The creation of the ‘worker’ has generated confusion at times and is said to be something of a hybrid between the contractor and employee.  Therefore, workers have some rights that employees enjoy but contractors do not, such as rest breaks, paid holidays (28 days pro rata per annum), rights to work no longer than 48 hours per week etc.  They also have rights under the whistle blowing legislation, and crucially, the right to the minimum wage. 

Uber argued that the Claimants were not workers but were independent contractors.  However, the court, after looking at all the facets of the working relationship, decided they were ‘workers’ and thus entitled to claim those rights outlined above.  Bearing in mind that this is likely to affect all EU countries directly or indirectly as most of the rights claimed owe their origins to the Working Time Directive, the financial implications are ‘mega’, or uber, if you like.

In view of the potential liability facing the company, they have decided to appeal the judgement, and of course this will be awaited with interest, not least by companies such as Cleaning Handy and Food Deliveroo, who hire workers as and when required via an App (all part of the ‘gig’ economy, to use the new jargon).

If all this were bad enough, and it would have been, there is now the new spectre hovering in the shadows which if it materialises, will create a much more expensive setback for Uber with some estimates that with a workforce of 40,000 in the UK, the National Insurance contributions alone could amount to an eye watering £150 million per year.   How could this happen?  If the ‘workers’ succeed in arguing that further and in addition, they are ‘employees’, then another range of statutory rights come into play, such as all family and maternity rights, rights to redundancy pay, employment contracts, unfair dismissal rights, SSP, employers liability insurance etc. 

Uber employment law

All employment lawyers (as well as HMRC) will be sitting and watching developments in this case with keen interest.  This is because of the wide implications flowing from the decision in this case, meaning businesses may need to realign their recruitment and employment models. Uber must simply hope that bad news does not become worse news.