Over two days in July, the Supreme Court sat for the final round in what has been a long running saga between international ride-hailing company Uber and two of its drivers, James Farrar and Yaseen Aslam that began in 2016 (Aslam and others v Uber B.V. and others).
The dispute is centred on the question of whether Uber drivers are self-employed independent contractors or 'workers' within the meaning of section 230 of the Employment Rights Act 1996 ('ERA') and other statutes.
The facts
Uber is a ride-hailing cab service accessible via a smartphone app, which locates the nearest driver to a passenger who wishes to use the service.
In 2016, Uber drivers James Farrar and Yaseen Aslam, backed by their union GMB, brought an Employment Tribunal claim against Uber stating that they were entitled to the National Minimum Wage, holiday pay and had suffered detrimental treatment for whistleblowing. The basis for this claim was that Uber drivers meet the definition of 'workers' within the meaning of section 230(3)(b) of the ERA, s.54(3)(b) of the National Minimum Wage Act 1998 and reg.2(1) of the Working Time Regulations 1998.
The terms and conditions between Uber and its drivers state that the company does not provide transportation services but is acting as agent for third-party providers. This summarised the relationship between Uber and drivers as one of principle and agent; Uber purported to be acting as a 'lead generating' agent that connected the drivers with opportunities for self-employed cab driving jobs. Uber maintained they were merely a 'technology' company. The contract between Uber and its drivers expressly stated that it was not an employment contract, but a contract for services.
During the Tribunal proceedings it emerged that Uber sought to control the behaviour of its drivers in various ways. This included:
- Requiring a driver to log out of the app if they did not wish to carry passengers, in order to avoid creating an unsatisfactory user experience;
- Deactivating a driver's access to the app if customer ratings fell below an acceptable level; and
- Discouraging drivers from cancelling trips or soliciting tips.
Evidence also emerged that Uber sometimes settled passenger complaints without reference to the driver, including refunding money. Sometimes this money would be refunded by Uber itself.
The initial Tribunal finding
On 28 October 2016 the Tribunal found that the drivers were employed as 'workers' by Uber within the definition of section 230(3)(b) ERA because they considered that the arrangement was such that the drivers had agreed to work personally for Uber under a contract for services, rather than each driver running their own business.
The Tribunal considered Uber to be in the business of providing taxi services rather than generating leads and rejected Uber's submissions (based on its written contractual documentation with the drivers).
In coming to this view, the Tribunal looked at the degree of control that Uber held over the drivers as outlined above, which they decided was enough to indicate that the drivers were engaged under a contract for services.
The Tribunal also looked at exactly when the drivers were to be considered 'workers'. This concerned the timing and connectivity of the Uber app. The Tribunal took the view that the drivers were 'workers' whilst:
- The app was turned on (and accordingly the drivers were 'signed in' to the app);
- The drivers were in a territory in which they were authorised to work; and
- The drivers were willing and able to accept bookings through the app.
This included times when a driver was not carrying a passenger and had not accepted a ride request.
When the app was turned off, the drivers were not 'workers' as there was no contractual obligation to provide the taxi driving services. The Tribunal also accepted that there was no obligation to turn the app on at all.
The Tribunal finding meant that the drivers were entitled to the protections afforded to workers under English law, namely an entitlement to the National Minimum Wage, paid rest breaks and holiday pay.
The Tribunal also took the view that for the purposes of the National Minimum Wage Regulations 2015 the drivers were engaged in 'unmeasured work'.
EAT and Court of Appeal
On 10 November 2017 Judge Eady dismissed Uber's appeal to the EAT. She held that the Tribunal had not erred in its approach or conclusions when rejecting Uber's submission that the relationship between the company and the drivers was one of principle and agent. The Tribunal had been correct in construing the basis of the relationship based on the reality of the obligations and the working situation. This was the approach set out in the Autoclenz case and the EAT reiterated that the starting point in determining the nature of the working relationship must always be the statutory language, not the label used by the parties.
The EAT were less sure about the ET's findings about the timings of the driver and their worker status. Whilst during an assignment, when the driver was carrying a passenger, their status as a worker was unquestionable, the EAT noted that it was a little more difficult to say the same for when a driver was in-between assignments. Judge Eady concluded that this was a matter of fact and degree based on the availability of other ride-hailing apps that the drivers could utilise as a source of income. The greater the availability and use of these apps, which a driver could engage in between accepting jobs for Uber, the less likely it was that they were workers in a contract for services for Uber during the specific time in between taxi jobs for Uber.
The Court of Appeal upheld the EAT's findings. They recognised that the facts found by the ET and EAT as to the reality of the working relationship between the drivers and Uber were inconsistent with the arguments put forward by Uber. They also agreed with the EAT that the ET had been entitled to reach the conclusion they did as to exactly when the drivers were 'working' for Uber. In doing so they took into consideration the penalty imposed on drivers for not accepting three consecutive ride requests within 10 seconds.
Implications
Whilst we won't likely hear the Supreme Court decision until October, the implications are enormous. The gig economy is likely to grow due to a higher demand in instant delivery and ride-sharing induced by lock-down and social distancing. 'Workers', usually classified as those on 'low-income', will be anxiously awaiting the Supreme Court decision because it could have a material effect on their household incomes, working patterns and employment rights.
On the other hand, businesses similar to Uber may be looking for ways to mitigate a detrimental ruling and may anticipate a review of the contracts for services with their gig-economy workers, which could mean expensive legal bills and a readjustment of current working practices. Business models and financial projections, as well as continued financing, may need to change to accommodate any increased expense as a result of the rights that workers acquire.
From a legal point of view, this saga has been very fact specific and a ruling in favour of the drivers will not necessarily apply to other gig economy workers. Notably absent has been the issue of 'personal service' in deciding the employment relationship, and whether the worker can appoint a 'substitute' in their place, as is the case with apps such as Deliveroo.
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