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What does the Uber Employment Tribunal case mean for employers?

What does the Uber Employment Tribunal case mean for employers?

Expert view

On Friday, the London Employment Tribunal ruled that two drivers who work for Uber the taxi company, are not self-employed and should be classed as ‘workers’ under the Employment Rights Act 1996.

The definition of workers in the Act is somewhere between a contractor and an employee. A contractor has no rights. A worker has more rights than a contractor, but not the full rights of an employee.

Worker’s rights include:

  • Being given 5.6 weeks paid holiday every year

  • Being paid the national minimum wage or the national living wage

  • Being protected by the Working Time Directive, meaning a maximum working week of 48 hours and being allowed rest breaks

  • Being protected by whistleblowing legislation.

This is a significant ruling for the two Uber workers who took their claim to the Employment Tribunal, but what does this mean for other business owners who have self-employed people working for them?

This ruling, as with most cases in court is based on the facts and on the specific model of Uber’s business. This business model is commonly known as a ‘gig economy’. This simply means that Uber workers work in a business that relies on workers who will work independently, in temporary positions.

These types of gig economy businesses are becoming more and more common in Britain. Some would argue they are a new way of giving workers and businesses flexibility but others, including trade unions and even the people who work for gig economy businesses themselves, argue that it’s just an easy way to get people to take on temporary work for low pay.

Some other businesses that engage temporary workers who are self-employed are Deliveroo, Hermes and Yodel.

But does this mean that if you pay self-employed workers that you could be taken to a tribunal and made to give these self-employed people workers’ rights?

No it doesn’t. One ruling in the Employment Tribunal does not mean that you’ll have to review your position.

First of all, this is only a first ruling. Uber have already said they will appeal the decision and because of the far reaching consequences of this ruling, it’s likely to be heard by the Court of Appeal and possibly the Supreme Court.

Secondly, although there may be other self-employed people making claims against their employers, any further decisions will be stayed until any appeals have been satisfied.

It’s a case of wait and see what happens next in this case, but if you are concerned about the impact of this judgment on your business, please give us a call. We’ll be happy to offer you some advice.

Call us now on 0117 926 4121 or make a free enquiry online.