The possible implicactions of the Uber judgement

08 November 2016

8 November 2016

According to Pensions Expert, a spokesman from the Pensions Regulator said the regulator would be looking closely at the judgment and was “considering” whether Uber would be obliged to auto-enrol drivers.

An Employment Tribunal ruled that two drivers who provide services to gig economy stalwart Uber are 'workers' within the meaning of the Employment Rights Act 1996.

While the preliminary hearing only affected the two claimants, the precedent set could change the way workers are paid benefits throughout the gig economy, if upheld. Uber said it would be appealing the decision.

Auto enrolment

Currently, Uber drivers are considered self-employed, meaning there is no requirement for them to be auto-enrolled.

But the new decision establishes the two drivers as “workers”, a standard of employment defined under the Employment Rights Act 1996.  A spokesman from the Pensions Regulator said the regulator would be looking closely at the judgment and was “considering” whether Uber would be obliged to auto-enrol drivers. highlights how much the employment status issue is once again at the forefront of a number of minds:

"Not least HMRC’s who have set up a new compliance team focused on 'gig economy' workers.  The key is always to look at the reality of the relationship, rather than what the nicely drafted legal documents say.

Also, with the Commons Select Committee on Business, Energy and Industrial Strategy launching an inquiry into the future world of work, including a focus on pay and the status of agency workers, this whole area is of strategic importance for employers."

Do you complete ‘right to work checks’ for ‘workers’?

Pinsent Masons corporate immigration expert, Jo Hennessy has flagged that the 'worker' debate also brings into focus the requirement for employers to do right to work checks: Gig economy employers should consider right to work checks:

Employers are generally familiar with the requirement to perform right to work checks against their employees, but many do not conduct them against workers, as these individuals are not classed as employees, according to corporate immigration expert Joanne Hennessy of Pinsent Masons, the law firm behind However, the UK immigration authorities were often reluctant to accept the "subtle distinction" between the two types of individual.

"The relevant immigration legislation describes employees as 'those under a contract of service or apprenticeship'.

Employing someone who does not have the right to work in the UK can result in civil liability of up to £20,000 per illegal employee, plus criminal liability. Carrying out right to work checks, as prescribed by the government, will secure a defence to such civil liability. We have experience of employers receiving illegal working civil penalties in respect of casual workers against whom they had not conducted right to work checks.

This is an issue that the taxi industry will be increasingly aware of, given that right to work checks are to become a requirement for taxi and private hire vehicle licensing under the 2016 Immigration Act. In the meantime, firms such as Uber and others operating in the 'gig' economy should keep this in mind and be aware of the illegal working exposure that worker status can create. If there is any uncertainty as to whether someone is a worker or self-employed, it would be sensible to ensure they have the right to work in the UK or risk significant exposure to illegal working penalties.”