Self-employed or Workers? Supreme Court Unanimous Decision in Favour of Uber Drivers

From 17 March 2021, Uber has agreed to give its UK drivers a guaranteed minimum wage, holiday pay and a pension. This decision is a direct result of the Supreme Court’s decision that Uber drivers are considered “workers” and not “self-employed”, after they dismissed Uber’s appeal.

The judgment had been eagerly awaited since the initial Supreme Court hearing in 2020. However, the outcome was no great surprise, considering that it was the fourth time the courts had reached the same conclusion. The significance of this decision is that there is no further right of appeal and therefore Uber must now finally contend with a definitive ruling that their drivers are workers under UK employment legislation.

From 17 March 2021, Uber has made the following changes:

  • They will pay at least the National Living Wage for over 25s, irrespective of a driver's age.
  • All drivers will be paid holiday time based on 12.07% of their earnings, paid out on a fortnightly basis.
  • Drivers will automatically be enrolled into a pension plan with contributions from Uber alongside driver contributions.
  • Uber will continue to offer free insurance in case of sickness or injury as well as parental payments, which have been in place for all drivers since 2018.
  • All drivers will retain the freedom to choose if, when and where they drive.

The judgement comes after a long-running battle in the UK courts, led by two former Uber drivers, who won an employment tribunal claim in October 2016. Uber unsuccessfully appealed the decision four times, taking it all the way up to UK’s highest court.

In reaching their decision on establishing ‘worker status’, the Supreme Court emphasised five factors, previously highlighted by the Employment Tribunal, which they found were particularly indicative of a worker relationship:

  • Uber dictated how much drivers were paid and whether to refund passengers.
  • Drivers had no ability to negotiate the terms in relation to their contract with Uber.
  • Once a driver logged into the Uber app, they were constrained in rejecting trips as the rate of acceptance and cancellation was monitored.
  • Uber monitors a driver’s service through a rating system, and had the capacity to terminate a driver if the service did not improve after repeated warnings.
  • The relationship between the driver and the passenger was restricted to a minimum, preventing the driver from establishing a relationship with a passenger capable of extending beyond an individual ride.

Further implications for Uber

We have not seen the end of this particular case, since the worker status issue was only preliminary. It will now return to the Employment Tribunal to determine the compensation due to the drivers in respect of their claims for holiday pay and unlawful deductions from wages.

Further, there has been no mention by Uber of volunteering compensation to its drivers generally for past entitlements, and the minimum payments that Uber has said it will apply going forward will not be paid when drivers are logged on but not carrying out trips. The Independent Workers Union of Great Britain is calling on HMRC to enforce the Supreme Court ruling and ensure that drivers receive a minimum rate of pay from the moment they log onto their app, not only when they are carrying out trips.

Numerous linked cases in the UK have been stayed pending the outcome in the Supreme Court and will now be recommenced, and the floodgates may now be open for many more.

If you are unsure of your employment status or work with contractors, it is best that you receive legal advice to ensure the validity of your agreement. Please contact our team.