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Latest gig economy decision - drivers are workers, not self-employed

Unless you have managed to escape to an exotic destination for the last few months (without the use of a taxi) you will have, at the least, heard the name “Uber” in the news.

Uber was first in the public eye just over a year ago in relation to a claim in the employment tribunal brought by some of its drivers, claiming they were workers rather than self-employed. More recently (and quite possibly linked to this) Uber has been in the spotlight for Transport For London’s (“TFL’s”) decision to deny Uber a new licence to operate in London on the grounds that it is “not fit and proper to hold a private hire operator licence”. It was also announced this week that Jo Bertram, head of Uber in northern Europe, has left, although Uber has denied this is related to TFL’s licence decision.

The claim against Uber in the employment tribunal (which found that the drivers were workers) reached the Employment Appeal Tribunal in a hearing last week.

In the meantime, there have been a number of similar claims brought against other organisations (including a cycle courier company and plumbers). The most recent of these decisions has been made against minicab company Addison Lee, where the employment tribunal decided that Addison Lee had wrongly classed some drivers as self-employed.

Why does it matter whether drivers are classed as self-employed or workers? One answer is pay. For example, workers are entitled to receive national minimum wage (currently £7.50 an hour for those aged 25 or over) and they are entitled to paid holiday. Self-employed individuals have no such rights. This result could be costly for Addison Lee, as the Guardian reports that Addison Lee uses 3,800 “self-employed” drivers in London who may be affected by the case brought by three drivers. The estimate of holiday pay alone (by the drivers’ lawyers) could amount to £4,000 each.

What about Uber and the gig economy? Apparently one of Uber’s latest arguments is that it is not part of the gig economy. This is interesting given that Uber is often given as an example when describing the gig economy as workers who get paid for the “gigs” they do.

What will happen next? Who knows, but watch this space. The Uber decision from the Employment Appeal Tribunal is expected in a few months’ time. 

In the meantime, if you are not sure whether the people you engage are employees, self-employed contractors or workers, or what documentation you need to put in place, contact our specialist team of employment lawyers.