Am I a worker or am I self-employed? Uber v Aslam (2021) UKSC5

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• Am I a worker or am I self-employed? Uber v Aslam (2021) UKSC5

The growth of the “gig economy” and a surge in atypical working arrangements in recent years has left many asking the all-important question:

“Am I a worker or am I self-employed?”

Workers benefit from important employment rights not available to the self-employed, but the distinction can be hard to make.  For people in this grey area, the Supreme Court decision in Uber BV and others v Aslam and others [2021] UKSC 5 was eagerly anticipated.

The case concerned Uber and the status of their drivers and the Supreme Court unanimously held that the drivers were workers for the purposes of employment rights.

Background

Uber offer individuals the ability to book “rides” on an easy to use app. Payment is taken over the app and the “Uber Driver” is assigned rides based on their location and availability. Uber’s business model classed their drivers as self-employed contractors.

Mr Aslam and several others complained to the Employment Tribunal that by not paying the national minimum wage and paid holidays, Uber had made unlawful deductions from their wages. Only workers get those rights, so that meant the Employment Tribunal had to decide if they “workers”. The key was if the claimants’ contracts with Uber fell under this definition:

“Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual” (section 230(3)(b)).

The Employment Tribunal held that Mr Aslam did fit the description above and was therefore a worker.

UBER appealed the decision and lost. Uber appealed again and lost. Finally, Uber appealed to the Supreme Court to settle the matter.

Uber’s arguments

Uber argued that:

1. they were only a booking agent for the drivers;
2. once a customer had accepted a ride the contract was between the driver and the customer as the services are provided by the drivers;
3. they only took a booking fee and did not perform the services themselves; and
4. the drivers are self-employed;

Are Uber drivers workers?

The Supreme Court disagreed with Uber’s arguments and unanimously decided that Uber drivers were workers, and entitled to holiday pay and wage protection.

The Court had to look at the reality of the relationship and “peer behind the veil” of the contract. The Court stated that the purpose of the employment legislation was to protect vulnerable workers who enter into contracts with much larger and more economically powerful companies.

The Supreme Court’s decision boiled down to 5 key factors:

1. When customers entered the app, it was Uber who set the fares and not the individual drivers. This meant that Uber limit how much the driver could earn and the driver was not in control of their own fees;
2. The terms and conditions imposed by Uber on their drivers were non-negotiable, unlike in a business to business relationship;
3. If the drivers turned down rides they were penalised and even locked out of the app;
4. There was a rating system whereby customers would rate their driver and drivers with low ratings could be prohibited from using the app if no improvement was made;
5. Uber limited communication between the customer and the driver to make sure the customer had to rely on the app for future rides.  The driver was unable to offer their services to the customers without the app.

On the whole, the Supreme Court held that control that Uber exercised over the drivers was close enough to that between an employer and a worker.

Comment

Obviously the decision could have far reaching implications for Uber and the “gig economy”. Uber drivers can assert all of the rights that a worker has, including the right to be paid at least the national minimum wage and to be paid for annual leave. This is the last port of call for Uber and is seen as the definitive ruling in the UK Courts.

The judgement may “open the floodgates” and Uber may have several claims on their hands for arrears of pay and holiday pay. There may also be additional tax and pension liabilities created.

Uber have since played down the importance of the judgement by saying that it will only apply to a small number of drivers in 2016.

The judgment is likely to prompt many other similar organisations to evaluate their business models and relationships with those providing services on their behalf. The decision shines the light on contractual arrangements used to disguise the true nature of a working relationship and may prompt other organisations to re-evaluate their practices.

If you have any queries about employment law or your employment status contact us at EmploymentDeptEnqs@raeburns.co.uk