Uber drivers are workers, rules Supreme Court

Aspiring barrister Joshua Xerri looks at the much-talked about employment case

In July 2020 I wrote for the Legal Cheek Journal on Uber’s Supreme Court appeal, detailing the case so far in the various lower courts. Today, the Supreme Court handed down its judgment in that case, unanimously dismissing Uber’s appeal. This follow-up article will go through the various parts of the judgment and think about the implications both for Uber, and further afield for other employers.

The nature of the dispute

The broad and simple summary of the case was, essentially, that Uber didn’t believe the claimants, a group of Uber drivers, were “workers”. The claimants insisted that they were workers, and wanted the various benefits and considerations afforded to those who meet that definition. Most notable of these would be the right to be paid at least the national minimum wage and receive paid leave.

The original employment tribunal decision ruled in favour of the claimants, establishing that they were workers. Their working hours were defined as being when their app was switched on, they were in their working territory, and they were ready to accept trips.

The question which the tribunal considered was whether the drivers fitted the definition of “worker” as laid out by Section 230(3) of the Employment Rights Act 1996. That definition includes individuals who work under a contract “whereby the individual undertakes to do […] personally any work or services for another party to the contract whose status is not […] that of a client or customer of any profession or business undertaking carried on by the individual”. The tribunal found that the drivers satisfied that definition.

This decision was upheld on appeal, first in the employment appeal tribunal, and subsequently in the Court of Appeal. Both appellate courts held that the employment tribunal had correctly defined the relationship between Uber and the claimants.

The issues

The hearing took place over two days on the 21 and 22 July 2020, in front of seven justices of the Supreme Court. The panel of justices reconstituted as six, as Lord Kitchin fell ill and it was uncertain when he would return. The issues for the appeal were, as they had been in the lower courts:

1) Whether the respondents (the drivers) were “workers” providing personal services to Uber; and
2) If they were, what periods constituted their “working time”.

The arguments were livestreamed and covered in detail. Threads detailing each day by employment barristers Jason Braier and Matt Jackson can be found here for day one, and here for day two.

Uber argued that their role in the equation was as a facilitator, merely connecting passengers with drivers. Any contract which was formed for each ride was therefore solely between driver and passenger, according to Uber. In terms of the 20% which Uber collects for each ride, they argued that this was merely a service charge, and was in line with their role as facilitating agents. They were keen to highlight the fact that their drivers have enormous flexibility in terms of their driving hours, and that this provided further indicators of their status as independent contractors.

Were the drivers ‘workers’?

The court unanimously dismissed Uber’s appeal. They addressed Uber’s arguments about being merely a facilitator or booking agent, stating that there was no factual basis for that assertion. As there were no written contracts between Uber London (the subsidiary of Uber BV who acted as the booking agent in this case), the correct interpretation of the legal relationship had to be drawn from the parties’ conduct. This essentially means looking at the way each party acted, and inferring what that means about the nature of their relationship.

The court defined the relationships as follows: it is Uber with whom the passengers contract, and Uber then engages drivers to transport the passengers who have booked. The court justified its conclusion on the relationship by returning to various findings which the original employment tribunal had made. Firstly, that Uber sets the fare for each ride and the drivers have no say in that figure. The drivers also had no say in the terms on which they perform their services.

Though Uber had been keen to highlight the autonomy of its drivers, the court emphasised the fact that drivers could be penalised if they refused or cancelled too many trips. This itself was a further indicator that the relationship between the parties met the “workers” definition above. There were other penalties and warnings, notably Uber’s famous “rating” system, whereby if a driver fails to maintain a certain rating, they are eventually terminated. On the autonomy point, the court also addressed the fact that Uber drivers are only able to interact with passengers in a very limited way which relates solely to the trip they are making. This does not, at face value, seem like the sort of relationship an “independent contractor” would have with a client.

All of these the court considered as indicators of the drivers being workers, rather than independent contractors. The drivers had little to no control over their terms of their service to passengers, penalties and warnings from Uber, and little in the way of independent autonomy of relationship with the passengers.

Working hours

On the second issue, the court addressed the working time question in just two short paragraphs. They held that all of the lower courts had been correct to find that the three conditions of “working time”, which I outlined above, were met.

Implications for Uber and further afield

What is clear from this case is that Uber have clearly tried to use minutiae and details of contracts to defend themselves from having to pay and protect their workers properly. The court’s approach to this was, to put it informally, say ‘if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck’. Uber will have to come up with the money to pay drivers for the time that they had their app switched on, and so were “workers” who were on the clock. It is not impossible, based on their approach in this case so far, and in other cases in other jurisdictions, that Uber may regard this as being a very narrow issue relating to their practices from a few years ago, and may attempt to resist paying out compensation to a great number of their drivers.

Joshua Xerri is an aspiring barrister.