What Uber's employment tribunal could mean for employers

08 September 2016

An article from Financial Director highlights the impact that this case could have on employers even though it only involves 19 drivers; any judgment will impact all other drivers.

Uber is arguing that its drivers, or ‘partners’ as it calls them, are self-employed, while GMB (the union representing professional drivers, and bringing the claim) is arguing that they are in fact workers and should be entitled to additional employment rights as a result.

National Living Wage

A finding that the drivers are workers would undoubtedly have a huge impact. One of the areas of concern for employers is that many Uber drivers claim to earn well below the National Living Wage (NLW) and some may earn as much as £3 per hour less than the NLW (currently £7.20 per hour). If that is the case, the worker will be entitled to re-claim the backdated additional payments they should have received in the two years prior to the ruling. Uber is estimated to have 30,000 Uber drivers in London alone, so backdated payments of up to an additional £3 for every hour worked over two years to 30,000 drivers will have a substantial cost.

Why are Uber so concerned?

Working individuals in the UK are categorised into three main, distinct groups all of which are entitled to different rights, and subject to different obligations:

Self-Employed

Those who are genuinely self-employed (i.e. in business for themselves) do not enjoy any significant statutory employment rights.

Workers

Workers are a category who are entitled to certain rights, but do not have the status of ‘employees’. Workers have the right to be paid the National Minimum Wage, holiday pay and pension contributions (subject to meeting eligibility criteria), as well as sometimes having TUPE rights and the right to claim sick pay. Additionally, they have the right not to be discriminated against.

Employees

Employees have additional rights on top of those of workers, including the right to maternity/paternity pay and shared parental leave, statutory notice on dismissal, redundancy payments and a right not to be dismissed unfairly (after 2 years continuous service).

The impact and cost to Uber increases with each batch of additional rights their ‘partners’ accrue depending on if they are deemed workers or employees. GMB are focusing their energy into obtaining a judgment that ‘partners’ are workers, as opposed to employees.

Read the full article from Financial Director.