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10 November 2017

Uber loses its appeal

The EAT has upheld the Tribunal decision that Uber drivers are “workers”, which means that they have certain employment rights such as the national minimum wage and paid annual leave.  It found that the Tribunal was entitled to reject Uber’s contention that its business was providing a technology platform facilitating taxi services rather than actually providing transport. Further, the Tribunal was right to look behind complex contractual documentation and focus on the reality of the working arrangements.  The key question was “when the drivers are working: who are they working for?” The EAT agreed that the Tribunal was entitled to find that the answer was “Uber”, rather than “themselves”.

The Judge found that although there are circumstances where individual drivers could operate their own separate business and enter into direct contracts with passengers; this was not born out by the reality of the Uber operation.  It rejected Uber’s argument that there were 30,000 separate driver-only businesses linked by a common platform.  Instead, the Tribunal had found that the drivers were integrated into Uber’s business, they could not grow their own business, had no ability to negotiate terms with passengers, did not have access to the passengers details and had to accept work on Uber’s terms. The drivers could not realistically be said to be operating their own business.

The issue which troubled the EAT Judge most was the Tribunal’s finding that all the time that the driver was logged on to the app and located within their authorised territory was “working time”.  However, as the drivers were required to accept at least 80% of all trip requests or risk their access to the app being suspended or blocked, this was sufficient to satisfy the definition under the Working Time Regulations of being “available to the employer” and at their disposal and the EAT therefore upheld this aspect of the Appeal.

The judgment is unsurprising and follows the recent trend of cases involving companies operating via digital platforms, which have all found that the individuals are “workers”. The potential financial implications for gig economy businesses are significant as the findings on working time mean these organisations may be liable for the national minimum wage for the time all individuals are logged on to the relevant app, and ready and available to work. The obvious area for future litigation is whether individuals are actually ready and available to work at any given time, particularly if they could be ready and available for more than one employer at that time. 

The Taylor Review reported earlier this year and recommended a recasting of the “worker” definition, but there seems (probably unsurprisingly) little appetite in government for an overhaul at this time.  The courts, however, are ensuring that the law is adapting to the modern economy through decisions such as this. If gig economy businesses don’t get their houses in order and ensure their documents reflect the true nature of the relationship, the courts may force them to do so.

It is understood that Uber will appeal to the Court of Appeal and it’s possible it will apply to leapfrog to the Supreme Court to be joined in with the Pimlico Plumbers appeal (due to be heard on 20 and 21 February 2018) on employment status. We await the next stage with interest.


For more information please contact Kirsti Laird on +44 (0)20 7427 6411 or at Kirsti.Laird@crsblaw.com.

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