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Uber drivers are 'workers' says Court of Appeal
Uber BV v Aslam
Drivers for Uber are ‘workers’ and not self-employed according to a majority judgment from the Court of Appeal.
In October 2016 an employment tribunal held that a group of Uber drivers (supported by their union the GMB) are not self-employed but are ‘workers’ who are entitled to workers’ rights including to be paid the National Minimum Wage and receive paid holiday. As part of its defence Uber denied that its drivers were entitled to workers’ rights, as it is just a technology company not a taxi provider, and that Uber drivers do not work for Uber but instead work for themselves as self-employed business men and women. See also ‘Uber, employment status and the gig economy’. Uber appealed, arguing that the tribunal had got it wrong and that it was in fact acting as agent for the drivers who were not workers but independent contractors.
The EAT dismissed the appeal on all grounds and in relation to the question of the contracts it said that the case law was clear - tribunals must look at the reality of the situation rather than what is said in the contract. The reality was that despite what the contracts said, the drivers were incorporated into the Uber business of providing transportation services, subject to arrangements and controls that did not point to a direct contractual relationship with the passenger every time and therefore away from the argument that they were working in business on their own account. Uber appealed.
Court of Appeal decision
The Court of Appeal, by a 2:1 majority, dismissed the appeal (Lord Justice Underhill, an eminent employment law judge and past President of the EAT, dissenting from the majority view). Permission has been given for Uber to go to the Supreme Court.
The essential question as regards worker status was whether, as the drivers argued, Uber contracts with the passengers to provide driving services, which the drivers perform for it; or whether, as Uber argued, it acts only as an intermediary, providing booking and payment services, and the drivers drive the passengers as independent contractors. The written terms provide the latter.
The majority of the Court of Appeal held that these terms do not reflect the practical reality of the relationship and can therefore be disregarded. It relied on the 2011 Supreme Court decision in Autoclenz Ltd v Belcher which it saw as holding that a court can disregard the terms of any contract created by the employer in so far as it seeks to characterise the relationship between the employer and the individuals who provide it with services (whether employees or workers) in a particular artificial way. The case shows that:
‘in the context of alleged employment (whether as employee or worker), (taking into account the relative bargaining power of the parties) the written documentation may not reflect the reality of the relationship. The parties’ actual agreement must be determined by examining all the circumstances, of which the written agreement is only a part. This is particularly so where the issue is the insertion of clauses which are subsequently relied on by the inserting party to avoid statutory protection which would otherwise apply. In deciding whether someone [is a worker] the fact that he or she signed a document will be relevant evidence, but it is not conclusive where the terms are standard and non-negotiable and where the parties are in an unequal bargaining position. Tribunals should take a “realistic and worldly-wise”, “sensible and robust” approach to the determination of what the true position is’.
The court also found helpful the recent case of Addison Lee v Lange which held that the tribunal had been entitled to disregard clauses in the driver contract which did not reflect the reality of the bargain between the parties.
Lord Justice Underhill, dissenting, would have held that far from being unrealistic or artificial, there was no inconsistency between the written terms and the working arrangements: those arrangements were not essentially different from those commonly applying where taxi and minicab owner-drivers are booked through an intermediary. As to the effect of Autoclenz, he was of the opinion that it:
‘gives no warrant for disregarding the terms [of the agreement] … [It] is an important tool in tribunals' armoury because it enables them to look to the reality of a relationship rather than a false characterisation imposed by the employer. But the premise is that the characterisation is indeed false. … [It] does not permit the re-writing of agreements only because they are disadvantageous. Protecting against abuses of inequality of bargaining power is the role of legislation …’
The majority also held that drivers are under a positive obligation to be available for work while the app is on, and that that amounts to ‘work’ for the purpose of the Working Time Regulations 1998. Lord Justice Underhill would have held that drivers should only be treated as working from the moment that they accept a particular trip.
Link to judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2018/2748.html
The most interesting part of this decision is that Lord Justice Underhill, who has a wealth of employment law experience and knowledge, disagreed with his two colleagues. This might provide a chink of hope for Uber once the claim reaches the Supreme Court.
These status cases are invariably very fact specific. Just because this appeal went in favour of the Uber drivers doesn’t mean that cases brought by others who work in the on-demand economy will inevitably meet with the same success.
The government has committed, in its Good Work Plan, to legislating to improve the clarity of the current status tests, potentially placing more emphasis on control and less on the right to substitution when deciding in favour of worker status.