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Some Lessons from Uber

Mon, 31 Oct 2016

Barrister - anthony korn

Anthony Korn highlights some lessons from the much publicised and controversial tribunal ruling in Aslam and Farrar v Uber BV, Uber London Ltd and Uber Britannia Ltd (case Nos 2202551/2015).

In a much anticipated judgment, on 28 October, the Employment Tribunal chaired by EJ Snelson ruled that two Uber drivers were workers within the meaning of Section 230(3)(b) of the Employment Rights Act, Regulation 36(1) of the Working Time Regulations 1998 and Section 54 (3) of the National Minimum Wage Act 1998 and therefore were entitled to the minimum wage, protection against unlawful deductions and statutory holidays as well as other ‘rights’ conferred on workers under the relevant statutory provisions.

Although the Claimants did not bring complaints under the Equality Act 2010, it is likely, that applying the findings and conclusions reached by the Employment Tribunal, they would have been found to have been employed within the meaning of Section 83(2) of the EA under a ‘contract to personally to do work’ and therefore would have been able to pursue a complaint of discrimination had this arisen (which it did not on the facts of the case).

In a long and detailed judgment, the tribunal gave eleven reasons why the Claimants were workers rather than engaged by Uber’s clients/customers. The ET also considered complex issues as to whether their contracts were governed by English Law or Dutch Law under the Rome Convention and questions as to how the drivers working time was to be calculated under Regulation 2(1) of the Working Time Regulations and Regulations 45 and 47 of the National Minimum Wages Regulations 1998.

Uber have stated that it will appeal the decision but as in all employment cases, an appeal is only likely to succeed if the ET erred in law or reached a decision which no reasonable tribunal could have reached on the facts having properly directed itself in law.

It is impossible to do justice to the detailed reasons given by the tribunal in a short ‘tweet’  but four key learning points can be distilled from the judgment:

  • In determining the status of the relationship tribunals will look at the ‘reality of the relationship’ (Autoclenz Ltd v Belcher and others [2011] IRLR 1175). The ET   concluded that the reality is that Uber is not just a technology platform but is a ‘supplier of transportation services’ and markets a ‘product range…the products speak for themselves: they are a variety of driving services…the marketing is not done for the benefit of any individual driver…it is done to promote Uber’s name and ‘sell its transportation services’.
  • In determining the reality of the relationship, tribunals will not allow themselves to be ‘deceived’ by the terms and conditions issued by the party which is in a dominant  bargaining position As Elias J (as he then was) put it in the case of Consistent Group Ltd v Kalwak [2007] IRLR 560, a case involving fruit pickers, ‘the concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses or clauses denying any obligation to provide or accepts work, in employment contracts, as a matter of form, even where such terms do not begin to reflect the relationship’. There was no substitution clause in Uber but Uber did argue that because their drivers were not under any obligation to carry out the work, they were not workers: the ET concluded that whilst this was correct in general terms, this did not prevent a contract from arising when the drivers were available for work and indeed under Ubers terms, drivers could be penalised if they were not available for jobs and would lose their account status if they did not accept at least 80% of the trips requests. This conclusion is consistent with the approach taken by the Court of Appeal in Clark v Oxfordshire Health Authority [1998] IRLR 125, a case involving the use of ‘bank nurses’, not specifically referred to by the ET in its reasons.
  • Other documentation and working practices must be consistent with what is described in the contractual documentation issued by the company. In Uber, the ET had regard to factors such as the amount and the method of payment which was controlled by Uber and was described as an 80% commission (although this was reduced when Uber’s fee went up to 25%). The ET also scrutinised the booking system: that there was no direct contractual relationship with the client, that Uber acted as an agent for the client rather than the other way round, that the drivers did not control what they charge, that a driver was compensated by Uber if the customer ‘soiled’ the vehicle, that the routes were ‘prescribed’ by Uber, that the identity of the client was withheld from Uber drivers and Uber drivers were not entitled to solicit future work from the clients direct. The Tribunal found that were other working practices which were more consistent with worker status such as Uber’s recruitment and training processes. The ET also referred to fictional documentation such as ‘fake invoices’ and described Uber’s rating system (quality control assessments) as amounting to a performance management/disciplinary procedure.
  • Tribunals will also take account of what the parties say about the relationship and whether this is consistent with true nature of the relationship. For example in Uber, the Company’s witness had told the GLA Transport Scrutiny Committee that it provided ‘job opportunities’ to people who had not considered driving work and thereby potentially generated ‘tens of thousands of jobs in the UK’. This was inconsistent with Uber’s assertion that their drivers were running 30,000 independent businesses: the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform was ‘’faintly ridiculous’.

The Uber ruling does not necessarily mean that all those engaged in the so called ‘gig’ economy are entitled to workers’ rights. The ET itself recognised that its reasoning did not necessarily prevent Uber from devising a business model which did not confer ‘worker’ status on their drivers but the difficulty in these situations is to combine a sufficient independence with the commercial objectives of the organisation. Uber appear to have got it wrong in that they gave priority to the latter over the former.           

This article was written by Employment Law Barrister Anthony Korn. Click here to view Anthony's profile.      

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