In a landmark judgment which will have wide-ranging implications for workers and employers in the gig economy, the Supreme Court has upheld an employment tribunal’s decision that Uber drivers were workers and therefore entitled to the minimum wage, statutory annual leave and protection from detriment under the Employment Rights Act 1996.
The claimants performed driving services booked through the Uber app, which is owned by Uber BV. An employment tribunal decided that the claimants provided services as “limb (b)” workers to Uber London Ltd (“ULL”), a subsidiary of Uber BV which has been licensed since May 2012 to operate private hire vehicles in London.
Uber challenged the employment tribunal’s decision unsuccessfully in the Employment Appeal Tribunal ( IRLR 97) and the Court of Appeal ( ICR 845).
On appeal to the Supreme Court, Uber argued that the courts below had erred in law by disregarding the characterisation of the relationship in the written contracts between Uber BV and the drivers and between the Uber companies and the passengers. It pointed out that the written agreements state that the role of Uber BV is to provide technology services and act as a payment collection agent for the driver and that the only role of ULL (and other Uber UK companies which operate outside London) is to act as booking agent for the drivers.
Dismissing Uber’s appeal, the Supreme Court unanimously held that the way in which a relationship is characterised in a written agreement is not the appropriate starting point in applying the statutory definition of “worker” and should never be treated as conclusive, even if the facts of the case are consistent with more than one possible legal classification. The Court observed that the efficacy of employment protection legislation would be seriously undermined if putative employers were given the power to determine for themselves whether legislation designed to protect workers should apply to those who provide services for them.
The Court endorsed a ‘modern approach to statutory interpretation’ in the context of protective statutory provisions, approving the statement of Ribeiro PJ in Collector of Stamp Revenue v Arrowtown Assets Ltd (2003) 6 ITLR 454, para 35:
“The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.”
The Court went on to say that the correct approach in deciding whether a person is a worker is that endorsed in Autoclenz Ltd v Belcher  ICR 1157 and in Carmichael v National Power plc  1 WLR 2042 i.e. to consider all of the relevant circumstances including the written terms, the way in which the relationship has operated in practice and the evidence of the parties as to their understanding of it. There is no legal presumption that the written terms contain the whole of the parties’ agreement and “any terms which purport to classify the parties’ legal relationship or to exclude or limit statutory protections by preventing the contract from being interpreted as a contract of employment or other worker’s contract are of no effect and must be disregarded”.
The Court noted that the vulnerabilities of workers which create the need for statutory protection are subordination to and dependence on another person and the degree of control exercised by that person.
Although the claimants could decide when and where they worked, the tribunal had been entitled to find that during the periods when they were performing driving services the drivers were working for and under contracts with ULL. The tribunal’s findings of fact demonstrated that the transportation service provided by drivers and offered to passengers through the Uber app was very tightly defined and controlled by Uber and that the drivers had little or no ability to improve their individual economic position through professional or entrepreneurial skill.
The Court also rejected Uber’s appeal against the employment tribunal’s finding that a driver was working under his contract with ULL when he (a) had the Uber app switched on, (b) was within the territory in which he was authorised to use the app and (c) was ready and willing to accept trips. The Court held it was open to the tribunal to reach this conclusion since there was no evidence to show that at the material time drivers logged into the Uber app were also able to hold themselves out as being at the disposal of other app-based transportation services.
Oliver and Melanie have also written a piece for LexisNexis on the judgment, which can be viewed here.
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