UK SC | Whether an Uber driver is a “worker” for the purposes of employment legislation that gives “workers” rights and other employment benefits? SC decides

United Kingdom Supreme Court: A Full Bench of Lord Reed (President), Lord Hodge (Deputy President), Lady Arden, Lord Kitchin, Lord Sales, Lord Hamblen and Lord Leggatt dismissed the appeal finding no reason to interfere with the impugned decision of the Employment Tribunal.

Background

The facts of the case are such that the first appellant, Uber BV, is a Dutch company that owns the rights in the Uber app, second appellant being Uber London Ltd (“Uber London”), a UK subsidiary of Uber BV which is licensed to operate private hire vehicles in London and the third appellant being Uber Britannia Ltd, another UK subsidiary of Uber BV which holds licenses to operate such vehicles outside London but has been collectively called “Uber” for the purpose of the judgment. The claimants, and respondents to this appeal, are individuals who work or used to work as private hire vehicle drivers, performing driving services booked through the Uber app. The claimants further filed a claim to establish whether an Uber driver is a “worker” for the purposes of employment legislation which gives “workers” rights to be paid at least the national minimum wage, to receive annual paid leave and to benefit from certain other protection which was decided in claimants favour stating that claimants were “workers” who, although not employed under contracts of employment, worked for Uber London under “workers’ contracts” within the statutory definition of Section 230(3) of the Employment Rights Act 1996. Assailing this order an appeal was filed by Uber before Employment Appeal Tribunal which was further dismissed, and a further appeal to the Court of Appeal was filed which came to be dismissed again. Aggrieved by this, the instant appeal was filed challenging the impugned order before this Court.

Issues

Issue 1: Whether an Uber driver is a “worker” for the purposes of employment legislation which gives “workers” rights to be paid at least the national minimum wage, to receive annual paid leave and to benefit from certain other protections?

Issue 2: What periods during which a driver is employed under a worker’s contract count as working time?

 Submissions

 Counsel for the appellants submitted that relying on the terms of the written agreements between Uber BV and drivers and between the Uber companies and passengers and thereby states that when a request to book a private hire vehicle made through the Uber app is accepted, a contract is thereby created between passenger and driver, to which no Uber entity is a party and under which the driver is solely responsible for providing transportation services to the passenger. Uber also relies on terms of the written agreements which state that the only role of Uber BV is to provide technology services and to act as a payment collection agent for the driver and that the only role of Uber London (and other Uber UK companies) is to act as a booking agent for drivers.

Analysis

There are five aspects to justify that the claimants were working for and under contracts with Uber, these are as follows:

  1. When a ride is booked through the Uber app, it is Uber that sets the fare and drivers are not permitted to charge more than the fare calculated by the Uber app. It is therefore Uber which dictates how much drivers are paid for the work they do.
  2. Second, the contract terms on which drivers perform their services are imposed by Uber and drivers have no say in them.
  3. Third, once a driver has logged onto the Uber app, the driver’s choice about whether to accept requests for rides is constrained by Uber. One way in which this is done is by monitoring the driver’s rate of acceptance (and cancellation) of trip requests and imposing what amounts to a penalty if too many trip requests are declined or cancelled by automatically logging the driver off the Uber app for ten minutes, thereby preventing the driver from working until allowed to log back on
  4. Fourth, Uber also exercises significant control over the way in which drivers deliver their services. One of several methods mentioned in the judgment is the use of a ratings system whereby passengers are asked to rate the driver on a scale of 1 to 5 after each trip. Any driver who fails to maintain a required average rating will receive a series of warnings and, if their average rating does not improve, eventually have their relationship with Uber terminated.
  5. A fifth significant factor is that Uber restricts communications between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.

Observations

Issue 1:

The Court observed that as per the facts there was no written contract between the drivers and Uber London, the nature of their legal relationship had to be inferred from the parties’ conduct and there was no factual basis for asserting that Uber London acted as an agent for drivers The correct inference was that Uber London contracts with passengers and engages drivers to carry out bookings for it. Moreover, it was also observed that it is wrong in principle to treat the written agreements as a starting point in deciding whether an individual is a “worker”.

The Court relied on judgment Autoclenz Ltd v. Belcher [2011] UKSC 41 and observed that the correct approach is to consider the purpose of the relevant employment legislation which is to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position in relation to a person or organization which exercises control over their work. The legislation also precludes employers, frequently in a stronger bargaining position, from contracting out of these protections.

Issue 2:

As per Working Time Regulations 1998, “working time” is defined in regulation 2(1), in relation to a worker, as “any period during which he is working, at his employer’s disposal and carrying out his activity or duties”. Therefore the Court observed that time spent by the claimants working for Uber was not limited to periods when they were actually driving passengers to their destinations, but included any period when the driver was logged into the Uber app within the territory in which the driver was licensed to operate and was ready and willing to accept trips.

Held

The Court thus held that taking these factors together, the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by 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. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance. Thus it was considered that comparisons made by Uber with digital platforms which act as booking agents for hotels and other accommodation and with minicab drivers do not advance its case. The court rightly found the drivers to be “workers”. The Court also rightly decided to not interfere with the employment tribunal’s decision regarding ‘working hours’.[Uber BV v. Aslam, On appeal from [2018] EWCA Civ 2748, decided on 19-02-2021]


Arunima Bose, Editorial Assistant has put this story together

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