A recent ruling by the London Central Employment Tribunal against online taxi firm Uber could have wide-ranging implications for the relationship between many firms and their self-employed workers – or the so-called ‘gig economy’.
The Tribunal held that Uber drivers are not self-employed, but that they fall into the definition of a ‘worker’ under section 230(3)(b) of the Employment Rights Act 1996 (and equivalent definitions in the Working Time Regulations 1998 and the National Minimum Wage Act 1998).
For the Uber drivers, this means that they are legally entitled to the national minimum wage, paid annual leave, sick pay and other essential rights. What has been described as a ground breaking decision will not only affect over 40,000 Uber drivers, but could also result in claims from thousands of other ‘workers’ whose employers try to class them as self-employed.
Many drivers have been working for less than £5 per hour some days (£7.20 being the National Minimum Wage for workers over 25), and under tremendous pressure to work long hours, with repercussions from the company if they declined a pick-up.
This landmark case has heard that Uber tried to argue that they were a technology firm, not a travel business. They said that the drivers were self-employed, did not work for them and merely used their technology. The Tribunal however disagreed with their argument, stating that it did not reflect reality of the working day, and their level of control over the drivers means that they will be classed as working for Uber under a worker contract. The Tribunal did highlight that Uber could have devised a business model that did not involve it employing drivers, but it was simply the case that Uber’s chosen model failed to achieve that aim.
No doubt this ruling will be appealed by Uber, who have already commented that the ruling will deprive their drivers ‘of the personal flexibility they value’. In the event that the decision is confirmed, there could be huge implications for businesses in a similar situation. More information can be found at: http://www.bbc.co.uk/news/busi...
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