Back in October of last year, a tribunal dismissed as ‘faintly ridiculous’ Uber’s assertion that its drivers were self-employed. Uber appealed, and lost.
Uber drivers are workers
The Employment Appeal Tribunal (EAT) agreed that Uber drivers are workers, rather than self-employed.
What are ‘workers’?
Employees, workers and the self-employed have different levels of protection under UK employment law. Workers don’t benefit from the full spectrum of rights available to employees (in particular they can’t claim unfair dismissal); but workers have more rights than the self-employed. Information on the rights of employees, workers and the self-employed is available for Workbox users at Employment Status.
As workers, Uber drivers can, in particular, claim the national minimum wage and paid holidays.
When are Uber drivers actually working?
The drivers’ working time and minimum wage entitlements depend on when they are actually ‘working’.
The EAT was clear that they are working once they accept a trip from Uber. But, are they also working when they are merely ‘on-duty’ i.e. logged into the Uber app, within their authorised territory, and able and willing to accept trips?
This will depend on the facts. If the reality is that drivers cannot accept trips from other taxi firms during this time (perhaps because Uber penalises them for not accepting a high percentage of its trips) then they will be working. On the other hand, they will not be working for Uber at times when they are genuinely at the disposal of other operators.
What about our self-employed contractors, freelancers or consultants?
The Uber case is fact-sensitive. Both the tribunal and EAT were clear: Uber could have devised an alternative business model in which the drivers were self-employed; this was simply not the case here. And Uber may well appeal.
But this isn’t a time for complacency.
Uber is by no means alone in facing claims from individuals that they are workers despite their ‘employer’ having them pegged as self-employed. It’s a high profile issue. Both Uber decisions went to great lengths to stress that contractual documentation labelling an individual as self-employed will not stand if it does not reflect the practical reality.
The recent Taylor Review suggested that we need a clearer definition of workers, and that all workers should be taxed as employees. It also backed the equalisation of national insurance for the employed and self-employed, noting that current differences create incentives for individuals and companies to use self-employment.
There is also talk of shifting responsibility for determining whether IR35 applies (and, it if does, for paying tax and national insurance) from intermediaries to employers in the private sector. When implemented in the public sector, this reportedly resulted in the addition of 90,000 people to the payrolls of public bodies in three months.
With all of this in mind, now is a good time to review the employment status of your workforce. Would self-employment designations stand up to scrutiny? What impact could potential changes have on your business?
Brodies’ employment and tax teams can work through any issues in your business and work with you to identify any risks and strategies for the future.
On November 10, 2017