South: Crossland Employment warns Uber decision may open floodgates
Beverley Sunderland, managing director of Abingdon-based Crossland Employment Solicitors, has reacted to the Employment Tribunal's ruling in favour of the Uber drivers in the case brought by Mr Aslam and Others, with the backing of the GMB union against Uber. She believes the decision that the drivers will be classed as workers may open the floodgates on other cases.
Sunderland is a highly experienced Tribunal and Appeal Tribunal advocate, and a regular trainer in employment law. During her 25-year career, she has worked not only in the City, but as an in-house lawyer and a commercial director for a plc. Crossland Employment specialises only in employment law, with clients ranging from FTSE 100 businesses, to SMEs and third sector organisations.
What it means for Uber drivers
She commented: “The tribunal has decided that Uber drivers were engaged as ‘workers’ and ‘not self-employed’ and if this decision is accepted by Uber and not appealed it will have major financial implications for the business. The cost of engaging the drivers will increase as it will have to pay both the minimum wage and give paid holiday. It’s also very likely that there are already a number of potential cases waiting in the wings and this decision is likely to encourage many others to come forward.
“It remains to be seen if these higher costs will be passed on to the consumer in the form of higher fares, or whether it may even threaten the very existence and long-term viability of the Uber business model.”
On Uber’s probable next move, she said: “In terms of the wider impact of this decision on UK employment law it should be remembered that this is an Employment Tribunal decision and so does not set a legal precedent, and the decision does not have to be followed by another tribunal. Only decisions of the appeal courts set legal precedent and have to be followed by all lower courts/tribunals. However, given the importance of this case and it’s far reaching implications it’s very likely that Uber will appeal.”
Transport services, delivery drivers, couriers, IT contractors and warehouse businesses could all be hit
Sunderland elaborated on the implications for others: “This decision is likely to hit transport services, delivery drivers, couriers and warehouse workers to name a few, who are engaged on ‘self-employed’ contracts. Small businesses that rely on such workers will be at particular risk as they’re unlikely to have the ability to absorb the higher costs associated with taking on these ‘workers’, especially where the flow of work is not guaranteed. So all businesses in the ‘gig’ economy which rely on a similar business model will be very concerned about the implications of this decision. These businesses often argue that the use of self-employed independent contractors allows them to respond to customer demand in a fluctuating market and that such flexibility is essential to allow the business to grow and survive, as well as offering individuals the flexibility of choosing when and how much they work.”
Decision doesn’t affect all self-employed workers
But she added: “This case does not set any general legal precedent applicable to all cases where someone engages a self-employed independent contractor as it was decided by applying well established legal principles to the particular facts in the Uber case. Each case will be decided on its own merits.”
She spelt out the broader legal picture: “Under UK employment law, there are three categories of employment status - self-employed, employees and workers. The genuinely self-employed are in business on their own account, generally they have the right to send someone in their place if they cannot work, they have freedom and control over how much or little work they do and are not entitled to the minimum wage, holiday pay or statutory sick pay. Employees, on the other hand, are subject to the ‘control’ of their employer and do not have the flexibility and freedom to refuse work offered by their employer. However, they are entitled to the minimum wage, paid holiday pay and statutory sick pay as well as the right to claim unfair dismissal after two years continuous service.
“Workers fall somewhere in-between the two; they are entitled to holiday pay and the minimum wage but don’t have the right not to be unfairly dismissed, other than for whistleblowing. They are also required to provide their services personally and cannot send someone to do their work in their place, unlike the genuinely self-employed.”
What next for the gig economy?
She offered the following advice: “Gig economy companies should wait and see whether the case is appealed to the Employment Appeal Tribunal and whether it goes on to set any legal precedent. In the meantime, these employers may wish to review their own individual arrangements against the legal principles applied by the tribunal to assess whether they are likely to fall foul of the decision and if so, consider moving individuals from self-employed status to ‘worker’ status and issuing contracts accordingly, paying holiday pay and the minimum wage.
“But companies should remember that no matter whether staff are self-employed or ‘workers’, arrangements should never be abused. If people are genuinely self-employed they should meet the key legal test for such status - they have freedom of control over their work in accordance with the law.”
