Why the 'gig economy' may never be the same again after Uber tribunal case

08 November 2016

You’ve probably heard the one about the taxi driver telling his fare how he loves his job: “I’m my own boss and nobody can tell me what to do,” to which the customer responds: “Take a left.”

Why the 'gig economy' may never be the same again after Uber tribunal case

Just last week though, an English employment tribunal made it clear that, in respect of Uber at least, it might not just be the customer calling the shots. Essentially due to the inherent degree of control apparently exercised over its drivers, Uber may have to grant basic employment rights such as the National Minimum Wage and holiday pay after it lost a preliminary hearing in a London tribunal, which found that Uber drivers are in fact “workers”. The car-hailing app has vowed to appeal the decision, which it says threatens to destabilise their unique and increasingly successful business model. 

Uber, which operates as a platform for thousands of drivers across the UK (and has in recent months seen a surge in popularity in Belfast), insists that it is a company which simply connects independent drivers with passengers in a move that takes us away from the traditional taxi model. 

In an e-mail to customers, Uber has defended its position, stating that a recent poll of 1,000 drivers found that “the overwhelming majority prefer being self-employed and joined Uber precisely because they want to be their own boss”. However, this recent decision is being viewed as a success by those advocating employment rights and protections for all in the workforce, particularly those operating in the new age “gig economy” in which large companies rely on an increasing number of self-employed contractors on short-term engagements to deliver core services.

The gig economy in the UK is estimated to have grown by around 14% in the past few months alone, with several household names being responsible for their fair share of the increase. For example, delivery firm Hermes recently hit the headlines when it emerged they had engaged over 10,000 people paid on a piece-work basis to deliver parcels using their own cars, fuel and under their own car insurance.

What though, does the Uber decision mean for these businesses?

Although the decision only affects the two drivers at the centre of the case, it demonstrates the very real possibility that “self-employed contractors” in the new gig economy may well qualify as “workers” within the meaning of the relevant legislation. This could mean they will be entitled to a limited number of employment rights (but not those afforded to “employees”).  Amongst other rights, they would be entitled to 5.6 weeks' paid annual leave each year; a maximum 48 hour average working week; rest breaks; the National Minimum/Living Wage; and the protection afforded by UK whistleblowing legislation.

It is probable that this decision will be appealed upward, possibly all the way to the Supreme Court. As such, the advice for businesses potentially affected at this moment in time is simply a word of warning: Although this decision is fact-specific, where there is sufficient control over supposed self-employed contractors, there is now an increased chance that claims will flow from those seeking worker status. 

John Kelly is a Solicitor in Worthingtons Commercial Solicitors, Belfast, where she specialises in Employment Law and can be contacted on 028 9043 4015

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