On Friday 28 October 2016 the Employment Tribunal issued a judgement which was well reported in the media as having wide ranging implications for self-employed people throughout the country. This article will examine whether those implications really are as far reaching as the press have suggested by examining how the Tribunal decided the case.
Uber allows customers to book a taxi service through a mobile app. It has been very successful because it has undercut its competitors on price and has been able to do so because its drivers are self-employed contractors rather than full employees. Nineteen drivers took the company to Court arguing that they are entitled to workers’ rights such as the national minimum wage, statutory holiday and sick pay, pension contributions, and the right not to have deductions made from their pay.
What makes the situation a little more complex is the fact that the law recognises three broad categories; the employed, workers, and the self-employed. Only the first two are entitled to full workers rights as highlighted above. Employees are the easiest to indentify, they are individuals who work under an employment contract. The second category of worker is broader and a bit harder to define but in essence includes any individual who undertakes work under an employment contract or any other type of contract where there is an element of control between the “employer” and the person performing the work. These include agency workers and short term casual workers, and to repeat because it is important, workers are entitled to the core employment rights and protections.
Self-employed persons are in business in their own right and are contracted to provide services on a case by case basis or over a period of time for an agreed fee. Self-employed people are in full control over what business they accept and take on and in control of their time management.
The key legal point here is control. Employees and workers are under someone else’s control (the law used to use the master and servant analogy to explain the issue of control) and are therefore entitled to full workers right and privileges. Self-employed people are their own masters and are not therefore entitled to workers rights.
How the case was decided
With little surprise control was the key issue in the Tribunal’s decision. There were a number of factors that lead the Tribunal to conclude that Uber drivers are controlled by the company and are therefore not self-employed. These include; the fact that if drivers refuse three jobs they will be blocked from the service for a period of time, the fact Uber interviews and recruits the drivers, the fact Uber controls key passenger information (such as surnames and contact details) and excludes the driver from it, the fact the drivers cannot agree a higher sum of money than that calculated by Uber, the fact that Uber subjects the drivers to a rating system which amounts to a performance management/disciplinary system, and finally the fact that Uber accepts risk of loss which is the drivers were truly self-employed would be on them.
The Hyperbole and the real situation
Being a lawyer (and therefore perhaps a natural pedant) I was confounded at the media’s portrayal of this case as having far reaching implications for self-employed people. This is because if you are really self-employed, that is you control what work you accept and set the terms, this case does not affect you. This case does have implications for those who are currently classed as self-employed but are actually carrying on services under the control of a company, as Uber was found to be doing.
As a final piece of commentary I would imagine Uber will appeal this decision and indeed given that the number of self-employed people is growing this will not be the last such case brought to the Courts. The law in this area will keep on being aware of these issues.