Uber – Employment Tribunal hands down its ruling on employment status

At 2:00pm on Friday 28 October, the Employment Tribunal handed down its ruling on the employment status of two drivers who provided their services to “gig economy” organisation.

The ET ruled that the individuals are 'workers' within the meaning of the Employment Rights Act 1996.

This case shares many similarities with the 2004 case of Roberts and others v Redrow Homes (North West) Ltd Wright v Redrow Homes (Yorkshire) Ltd which also found that the individuals were workers but not employees.

So, that begs the question, what is the difference between a worker and an employee in terms of entitlement and protection under law?

Workers are not entitled to full employment rights, only limited rights which include:

5.6 weeks paid annual leave each year. They cannot be asked to work more than 48 hours a week on average unless they opt out They must be allowed to take rest breaks They must be paid the national minimum wage including the national living wage if appropriate They are protected under the whistleblowing legislation.

However, as they are not deemed to be employees, they do not benefit from:

The right to receive statutory redundancy pay if their services are no longer required Protection under TUPE regulations should Uber sell its business at some point in the future The ability to claim unfair dismissal

That begs a few questions:

What will happen now? – We cannot be sure, but there is every likelihood that Uber will appeal the decision. Should they do so, this case could run and run in the same way that the case of Lock v British Gas Trading has been rumbling on for a couple of years now. What about the other Uber drivers? – This case only involved two of the Uber drivers. Interestingly, the media, during this case, interviewed other Uber drivers and many of those interviewed expressed satisfaction with the arrangements they had with Uber. It may well be that those drivers who are not happy with the current arrangement will submit claims. What should employers do? – The ET decision is based on the specific circumstances of this case and, strictly speaking, an ET decision does not set what is referred to as “case precedent”. Therefore other employers who believe they have workers in the “gig economy” might well look at their current arrangements and assess the possible risk to their businesses. What is the “gig economy”? – WhatIs.techtarget.com defines the gig economy as “an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements”.

“The trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. There are a number of forces behind the rise in short-term jobs. For one thing, in this digital age, the workforce is increasingly mobile and work can increasingly be done from anywhere, so that job and location are decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than that available in any given area”.

“In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff. From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. Ideally, the model is powered by independent workers selecting jobs that they're interested in, rather than one in which people are forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land”.

It is that link with the concept of gigs in terms of musical gigs that can help us get a better understanding of the concept.