UBER – STUCK IN A JAM?

The recent landmark case of Uber and Others v Aslam and Others [2021] UKSC 5 could mean big changes are in store for the rapidly growing ‘gig economy’.

What is the ‘gig economy’?

Journalist Tina Brown first coined the term in describing workers engaging in “free flowing projects… and part time bits” in 2009 and with ever advancing technology this industry has grown exponentially.

There are now many services from fast food delivery to taxi services which allow workers to operate on an ad-hoc basis as they choose, usually through some form of digital platform. This freedom and flexibility makes the concept especially attractive to certain groups such as students, who are easily able to work around their studies.

Employment status

In Employment Law there are generally three employment status types, each coming with their own degree of associated statutory rights:

• The first of these is that of an Employee/Employer relationship. This is the traditional form of employment where there are set hours or days with limited flexibility which benefits from the largest degree of statutory rights.
• The second is that of a Worker/Employer relationship which has a minimal degree of statutory rights with increased flexibility
• The third is that of a Self-Employed relationship which benefits from none of the statutory employment rights but has high flexibility. The ‘gig economy’ is a mixture of the second and third types of employment statuses.

The Uber case

Uber operates what they deemed to be a digital platform allowing self-employed taxi drivers to connect with passengers in their area. Uber stated that the contract for the fare was between the driver and the passenger and they simply take a fee for use of the digital service.

From Uber’s point of view, drivers had the third type of employment relationship benefiting from no employment Statutory Rights as was stated in their contracts.

The Supreme Court confirmed the ruling of previous courts that the drivers are not ‘self-employed’ and are instead ‘workers’; therefore they should benefit from Statutory Rights afforded to them such as Holiday Pay, Sickness Pay and National Minimum Wage for time spent working.

Once a driver logs in to the Uber digital platform, they must accept work or be penalised, removing flexibility. The drivers were unable to negotiate what fare they charged the passengers  and Uber dictated what type of vehicle they should use as well as specific routes to take.

Will this alter the landscape of the ‘gig economy’?

Potentially, but for now it’s likely that the effects will be limited to companies operating a similar employment model to Uber. While this case does not bring any major changes to Employment Law what it does highlight is that the courts will look past contractual terms and status definitions and instead make an assessment on what is happening on a day-to-day basis.

Employers will need to audit their current operating model to ensure that they are providing their staff with the correct employment rights associated with their employment status.

For further information on this article, please contact Damien Field, Legal Advisor at [email protected]

If you are an Arc Legal Assistance customer and have any concerns about your employment status, please call our 24/7 Legal Advice Helpline on the number provided in your policy documentation.  Our dedicated team of Legal Advisors will be able to provide advice in relation to specific circumstances and, if necessary, check if Legal Insurance could assist you further.