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Uber loses in the Supreme Court

View profile for Melissa Nelson
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On 19 February 2021 the Supreme Court unanimously dismissed Uber’s final appeal, finding that Uber drivers are considered to be workers.

The case centred around the vexed question of employment status. Whether Uber drivers are to be regarded as performing services for Uber or whether, as Uber contended, they perform services solely for and under contracts made with passengers through the agency of Uber. Uber submitted that they merely provided technological and payment collection services which facilitated the drivers’ contract with passengers.

However, the Supreme Court agreed with the previous findings of the Employment Tribunal, Appeal Tribunal, and Court of Appeal that the drivers are workers working for Uber during any period when the driver (a) had the Uber app switched on, (b) was within the territory in which he was authorised to work, and (c) was able and willing to accept assignments.

In reaching their decision on status, the Supreme Court emphasised five factors, previously highlighted by the Employment Tribunal, which they found were particularly indicative of a worker relationship:

  1. Uber dictated how much drivers were paid and whether to refund passengers.
  2. Drivers had no ability to negotiate the terms on which they contract with Uber.
  3. Once the driver is logged into the Uber app they were constrained in rejecting trips as the rate of acceptance and cancellation was monitored. 
  4. Uber monitors a driver’s service through a rating system, and had the capacity to terminate a driver if the service did not improve after repeated warnings.
  5. The relationship between the driver and the passenger is restricted to a minimum, preventing the driver from establishing a relationship with a passenger. Indeed the drivers had little or no ability to improve their economic position through professional or entrepreneurial skill.

Implications for Uber

The judgement has huge consequences for Uber. Now classed as workers, its drivers will be entitled to basic employment rights such as holiday pay, pension contributions, rest breaks, the national minimum wage (and the National living wage) and the protection of whistleblowing legislation.

As workers rather than employees however, the drivers have not won the full protection of employment rights, including the right not to be unfairly dismissed and the right to a redundancy payment.

How significant is this decision outside of Uber?

The ruling may open the floodgates to claims throughout gig-economy industries from self-employed consultants who may now argue that they have been miscategorised.  However the test of worker (or indeed employee) status depends on weighing up a number of factors, some which may point in favour of that outcome and others which may go against it.

The very specific way that Uber engages its drivers was closely analysed in order for the decision to be made, and the high degree of control that it exercises over its drivers from recruitment onwards was significant. Other operators' models may sit at a different point on the spectrum and, if challenged, an alternative outcome may be reached. 

The most significant impact of the ruling is clearly on the gig economy. However, the ruling also affects any business seeking to show that individuals they engage are not ‘workers’ or, potentially, ’employees’. The decision re-emphasises the importance of correctly assessing the status of self-employed contractors. An employment tribunal will examine the reality of the relationship between the parties, rather than simply relying on the contractual terms.  

If you need further advice on employment status, workers rights or support with employment tribunals please call us now for a friendly chat about your needs.