Never mind what the contract says!

Uber drivers are workers, says the Supreme Court

For anyone interested in the gig economy and the vexed question of employment rights for those juggling freelance and zero-hours roles, the judgement in the Aslam v Uber case is game-changing.  The Supreme Court has ruled that when it comes to deciding about worker status, what really counts is the reality of the situation, not what the contract says. The decision of our highest court means that there is nowhere else for this question to go, without major changes to employment rights legislation being made by Parliament – rumours about a post-Brexit reduction in workers’ rights continue to swirl and this judgment will put the Government’s stated commitment to safeguarding working standards under the spotlight.

The decision strikes a blow for the rights of those in the workforce who are ‘economically vulnerable’ and opens the door to minimum wage and paid holiday protections for those workers. The starting point, says the Court, is the legislation which gives protection to vulnerable individuals who have little or no say over their pay and working conditions. Those who are working in a ‘subordinate and dependent’ position (and have little hope of negotiating their terms with the person or organisation who exercises control over their work) should be protected by the statutory rights relating to minimum wage and working time   The Court’s view: it is inconsistent with the purpose of those statutory rights to treat the terms of a written contract as the basis for determining whether an individual falls within the definition of a ‘worker’.

Although the decision is being hailed as a major victory for the drivers in this case, their fight is far from over. The Supreme Court decision concerned only whether they are ‘workers’ and the case will now return to the employment tribunal where it started, for the specifics of their cases to be considered. Uber faces potentially huge bills from the Claimants for back-dated minimum wage and unpaid holiday, with many other drivers now likely to start their own claims.

Although the rights to which the drivers are entitled do not include the traditional ‘employee’ protections in respect of unfair dismissal or redundancy, the decision is likely to herald a major shift in the engagement of staff by companies looking for more flexible approaches to the traditional employment model. Further changes to the workplace landscape will follow in April for employers in the private sector – the advent of IR35 will reduce the attractiveness of certain ‘consultant’ models of working, with HMRC closing in on ‘disguised’ employment in this sphere.

If you would like to discuss the impact of these developments on the way your business engages staff, please do get in touch


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