Self-employed -v- worker status

Jan 2018

By Lucy Bloom of Osborne & Wise

As result of the King case above, the stakes have just got much higher for Uber and other companies where the employment status of their ‘self-employed contractors’ may be open to challenge.

Uber lost its appeal against a Tribunal’s decision that certain Uber drivers were ‘workers’ (and not self-employed contractors) and therefore entitled to receive holiday pay and the National Minimum Wage.

In Uber BV and others v Aslam and others, the Employment Appeal Tribunal agreed with the Tribunal’s decision that the Uber drivers in question could be classified as workers provided that they were (a) in the territory that they were authorised to work; (b) signed into the Uber app; and (c) ready and willing to work. It also found that the Uber drivers were subject to Uber’s control. For example, Uber records passenger details, but does not pass them onto the drivers. It also stops drivers passing their individual contact details to passengers. Drivers would be not be restricted in this way if they were genuinely self-employed.

This case will be particularly relevant to any organisations who operate a business model similar to Uber. However, it should be remembered that this case is very fact specific. If a business operates a similar ‘gig economy’ model, but exerts less control over its contractors, then such individuals could, in appropriate circumstances, be deemed to be self-employed contractors.

Uber are now appealing against this decision to the Court of Appeal. They attempted to leapfrog the Court of Appeal and move straight to the Supreme Court, but this application was rejected. It will be interesting to see whether the Court of Appeal agrees with the Employment Appeal Tribunal’s analysis later on this year.

The House of Commons has published a draft bill on Employment Status which aims to close some of the loopholes that allow so-called “bogus” companies to use self-employed status as a route to cheaper labour and tax avoidance. These issues are becoming increasingly scrutinised and it is clear that the courts are prepared to crack down on such matters. It is therefore important for organisations to take steps now to review (a) the reality of their working relationship with their ‘contractors’; and (b) their contractual documentation.