Uber has lost an important legal battle in the UK, after a tribunal held in London upheld the previous ruling that the ride sharing app must treat all its drivers as ‘workers’, meaning that they are entitled to both holiday pay and the minimum wage.
The decision made by the tribunal to reject the appeal from Uber is just another setback for the US company, which has been the subject of a number of legal battles in the UK. The UK is currently its most important market in Europe, and it will be keen to avoid taking part in many more legal battles here.
Uber plans to appeal the decision, saying that it is willing to take the case to the Supreme Court
The rejected appeal comes after Uber was told that it must change its approach in order to keep operating in London. Transport for London, who regulate transport in the capital, threatened to removed their licence earlier this year if it did not change working conditions for its drivers.
The appeal judge for the case, judge Jennifer Eady, wrote: ‘I am satisfied the [employment tribunal] did not err either in its approach or in its conclusion’, after the tribunal rejected Uber’s argument that their role was in connecting customers with independent drivers.
Uber has made clear its plans to put another appeal into the Court of Appeal, and potentially even the Supreme Court. If Uber explore all their legal avenues, then it will take years for the appeals process to be exhausted.
The UK’s acting general manager for Uber, Tom Elvidge, said: ‘Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal.’
When the appeals process has been exhausted, the outcome will be of massive importance to Uber’s operation in the UK. It currently has 50,000 drivers working in the UK, this would mean that it would have to provide a minimum wage and holiday pay to all of them if it was to treat them as ‘workers’. If this was to happen, Uber has said that it would mean it had to schedule drivers for shifts, instead of giving them the freedom to ‘log on’ if, and when they wanted to work.
It would also mean that Uber may face a much higher tax bill in the UK, due to having to pay the national insurance contributions required of an employer, as well as paying value added tax.
A group of UK MPs are set to propose a draft bill, in the hope that it will offer better protections and provide rights to so-called ‘gig workers’. The chairman of the work and pensions select committee, Frank Field, said that the introduction of this bill would ‘make these individual, but important, skirmishes a thing of the past, as legislation would protect all workers in similar situations.’
The prime minister, Theresa May, last year commissioned an independent review into the gig economy, but has still not announced whether she plans to implement any of its recommendations or not. One of the key suggestions which was put forward as a result of the review was that while those participating in gig work would be afforded more rights, the platforms that employed them would be able to keep a measure of flexibility over the rules surrounding the minimum wage.
As well as the focus that has been placed on Uber, there is increasing fear for the wider implications that the ruling might have on what is known as the ‘gig economy’. The case involving Uber is the most high profile example of how the law in the UK will accept the premise that those who earn a living through ‘gig’ apps are not employed by anyone, but instead work independently.
Once of the two Uber drivers who brought the case against their employers, James Farrar, said: ‘Uber cannot go on flouting UK law with impunity and depriving people of their minimum wage rights.’
Paul Jennings, who is a partner at Bates Wells Braithwaite, who represented the drivers, said: ‘We are delighted with today’s judgment, which is ethically and legally the right outcome.’
Deliveroo, who offer a food delivery service which works on the same ‘gig’ basis as Uber, is also facing a legal challenge from a number of its couriers who say that they are not completely ‘self-employed’.
It is not only Uber and Deliveroo who are facing these legal battles, with others employing the ‘contractor’ model including courier company CitySprint, taxi firm Addison Lee and Pimlico Plumbers facing their own backlash.
Before the judgement was made, the chief executive of one of the many gig economy apps said that if Uber lost the case, then it would make life difficult for the whole of the ‘on-demand’ economy.
The chief executive, who did not want to be named, said that for the politicians and courts to pass this motion against Uber would be against ‘the will of the hundreds of thousands of people’ who are keen to earn money using this kind of work. He added that the numbers of people signing up for so-called ‘gig’ work was increasing every day, not just in the UK, but across the world.
The original tribunal ruled in October 2016 that drivers working for Uber were ‘workers’, because the company exerted too much control over their work to be able to class them as totally independent.
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