Uber loses landmark UK battle as Supreme Court rules drivers are workers

February 19, 2021 0 By boss

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Uber has lost a landmark battle at the UK’s top court, which ruled on Friday that its drivers are workers entitled to rights such as the minimum wage in one of the most significant employment cases for decades.

The Supreme Court ruled in favour of 35 Uber drivers who first brought the case in 2016, arguing that they were not self-employed because Uber controlled much of their work, allocating their customers and dictating their fares.

Lord George Leggatt, one of the justices of the Supreme Court, said it had unanimously found against Uber. “Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill,” he said as he handed down the ruling.

The ruling in one of Uber’s biggest markets grants the drivers the right to holiday pay as well as the UK minimum wage and imposes a duty on Uber to set up a workplace pension scheme.

It also said drivers should be considered to be working for Uber for as long as they were logged into its app, rather than just for the time they were on a trip. Mick Rix, GMB national officer, called the ruling a “historic win”.

The judgement is one of the most important defeats Uber has suffered in global battles over the status of its drivers, who have come to symbolise the flexibility and stresses of gig economy work.

A UK employment tribunal will now assess how much compensation the drivers are entitled to, and the ruling opens the way for other Uber drivers to sue the company.

Leigh Day, the law firm fighting the case for some of the drivers who were represented by the GMB union, believes the drivers could be entitled to £12,000 compensation each. 

Paul Jennings, a partner at law firm Bates Wells, which represented the Uber drivers, said there were at least 15,000 claims from other drivers that had been waiting on the decision. “The judgment goes to the very heart of their business model and could lead to a significant increase in claims,” he added.

“There are millions of people in this new sector and there are clear parallels in terms of how companies in the gig economy operate — for this reason the Uber judgment is hugely significant.” he said.

Last November, Uber spent heavily on a campaign to dilute new workers rights laws in California. A public vote gave the company the right to continue to class its drivers as independent contractors.

Lawyers in the UK predicted the ruling would also affect some rival gig economy companies. Paul Chamberlain, head of employment law at JMW Solicitors, said the ruling “could be decisive for similar worker status cases and is likely to encourage those employed in gig economy roles to bring claims to enforce their rights as workers”.

In the UK, there are two types of employment statuses — “employees” and “workers” which are both entitled to the minimum wage and holiday pay, but only employees have broader rights such as suing for unfair dismissal. Independent contractors have none of these rights.

Joe Aiston, senior associate at law firm Taylor Wessing, said any move by Uber to engage its drivers as workers “would almost certainly involve passing those costs on to Uber’s customers in fare increases” which risks making the company less competitive.

Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, said Uber had made “some significant changes to our business”, including free insurance for drivers in case of sickness or injury. “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see,” he said.

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