Supreme Court ruling: Uber drivers must be classed as workers, and not self-employed individuals

22 February 2021

In a landmark ruling, Uber has been told that it must classify its drivers as workers, and not as self-employed individuals. This has huge implications for the company and its drivers, and could potentially impact the wider gig economy.

The outcome of the case means that the tens of thousands of drivers who work for the ride hailing app firm will be entitled to receive the relevant National Living Wage (NLW) / National Minimum Wage (NMW) rates and will also be eligible for holiday pay. Additionally, Uber drivers should be deemed as working, not only when completing trips with a passenger / passengers, but actually whenever they are logged in to the app – this includes the periods of time in which drivers are waiting for people to book taxis through the app.

The legal battle has been rumbling on for some time, and dates back to as far as October 2016, when Uber drivers James Farrar and Yaseen Aslam originally won an Employment Tribunal against the company. Uber appealed against this ruling, but the Employment Appeal Tribunal upheld the decision, in November 2017. Uber then took the case to the High Court, in December 2018, but the ruling was once again upheld. Uber subsequently appealed to the Supreme Court, following its previous three losses, and on Friday 19 February 2021, Lord Leggatt confirmed that the Supreme Court unanimously dismissed that appeal.

In arriving at the decision, several elements were considered, as follows:

  • Uber set the fares, essentially meaning that they dictated how much drivers earned
  • Uber set the contract terms, and drivers had no input or say on them
  • Uber had the power to penalise drivers who it felt were rejecting too many rides
  • Star ratings were provided to Uber drivers, which Uber monitored- Uber had the ability to terminate the relationship with drivers if, after repeated warnings, there was no improvement

These, amongst other various factors, led the court to assert that Uber must classify its drivers as workers, and not self-employed individuals.

 


Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.