Oxford University Press's
Academic Insights for the Thinking World

Uber drivers found to be ‘workers’ not employees

There has been much in the press recently about the employment tribunal ruling finding that two Uber drivers were not self-employed, but rather workers, and were therefore entitled to some employment rights.

In some reports it has erroneously been suggested that these drivers were found to be employees. This is not what happened. They claimed, and were found to be, workers, which is a different type of employment status, and gives far fewer rights than if they were employees.

What is, then, the difference between employees, workers, and self-employed people?  What, if any, impact will this employment tribunal case have on employment law?

There are three main types of what is known as ’employment status’. The first is that of employees. These are people who have an employment contract. It does not have to be a written contract – it can just be an agreement that someone will be employed by the employer. The employee and employer relationship is generally described as one of ‘mutual obligation’ – the employer has to provide work, and the employee has to turn up and do the work if it is provided. The employee has the benefit of the full panoply of employment rights (so long as they have been with the employer for long enough, depending on the right). This includes rights to protection from unfair dismissal and redundancy, which are only available to employees.

The next rung on the employment ladder is that of workers. There are a number of definitions of this, depending on the right being sought, but in summary, it is where a person is not an employee, but agrees to do work personally for someone else, and that person’s clients, rather than being in business on their own account and having their own clients. That is not the exact legal definition, but it sums it up.

However, just because Uber drivers have been found to be workers, that does not necessarily mean that other people who work in the so-called ‘gig’ economy will be in the same position

Essentially, therefore, workers are a kind of independent contractor who have some employment rights. They do not have all the rights of employees, but they do have some, such as holiday pay, working time rights, entitlement to the minimum wage, and protection for whistleblowing.

The third main type of status in employment law is that of self-employed people. These are people who are in business on their own account, and who actively market themselves as an independent person. Such people are not covered by most employment legislation.

The Uber case was decided by the employment tribunal. This is where employment disputes are first determined, and where decisions are made between opposing parties. A decision of the employment tribunal is not binding on other courts or tribunals, and so it does not set a legal precedent. Other tribunals do not have to follow the same decision, although they may find it persuasive.

Therefore although it is significant that a legal tribunal has found, on the particular facts of this case, that these drivers were workers rather than self-employed, this does not currently have any legal effect on other employers. It is simply a decision on those particular drivers and that particular company. It does not currently affect the contractual position of other Uber drivers, unless Uber wanted it to, or if the other drivers decided to bring a case themselves. If they did, then it is likely that any such case would be postponed until the outcome of any appeal. The decision does, however, increase the chances of other people in similar positions bringing cases for workers’ rights.

Uber, who argued that the drivers were self-employed and as such not entitled to any workers’ rights, will almost certainly be appealing to the Employment Appeal Tribunal (‘EAT’). If it does, then any decision of the EAT will be binding on future employment tribunals. If the EAT endorses the decision of the employment tribunal, then this will benefit other Uber drivers who have the same terms as those who brought the original case, but it would depend on the nature of their contracts.

However, just because Uber drivers have been found to be workers, that does not necessarily mean that other people who work in the so-called ‘gig’ economy will be in the same position, as each case depends upon its own facts. If the relationship between drivers, couriers, etc and the business are similar, then such people are likely to be classed as workers and so entitled to some rights. Businesses should therefore take legal advice, but they are not legally obliged to do anything simply as a result of the current employment tribunal case. It should be noted that there is also a case that will be heard in the future brought by cycle couriers.

It is possible that the Uber case could be appealed higher, to the Court of Appeal or even the Supreme Court, and so we will not have a final decision for some time. If the final appeal decision is in favour of the drivers, this could have a significant effect, as the growth of such business models is expanding rapidly, and will need to take these extra costs into account.

Featured image credit: ‘City, Taxi,’ by Unsplash. CCO Public Domain via Pixabay.

Recent Comments

  1. Eleanor

    This is a topic to follow! Wonder if we can start-up some business like Uber.

Leave a Comment

Your email address will not be published. Required fields are marked *