Two weeks ago my employment law blog addressed the important issue of employment status, and I considered the special issues arising with new ways of working. For most people in work this is not a problem as they will be classed as employees, and they have all ordinary employment rights, subject to length of service. The on demand or gig economy has increasing relevance for workers and in my recent blog I referred to the common requirement for workers to be classed as self-employed, when in reality the staff are working for someone else.
Recently, and Employment Tribunal issued a Judgment in relation to Uber drivers, deciding that they were not self-employed, and instead they were “workers” as defined in the Employment Rights Act 1996. The Tribunal decision does not bind other Tribunals, but it is inevitable that Uber will appeal to the Employment Appeal Tribunal, providing an opportunity for the higher courts to make a binding decision, with implications for others in similar industries. Over several years I expect that the Uber case will pass through the different levels of appeal, possibly reaching the Supreme Court.
The Tribunal Judgment has the potential to cause major problems for Uber and other work platforms which insist upon self-employment as a basis for earning money. Some obvious points concern the right to the National Living Wage and to paid minimum leave under the Working Time Regulations (5.6 weeks), but I am not sure that the press reports have grasped correctly the limited aspect of the decision. Yes, Uber will need to appeal, review contracts and consider the pricing structure of their business. However, for the Uber drivers they now know that they are not employees. They still have no right to minimum statutory notice, to receive redundancy payments and most importantly they have no right to allege that they have been unfairly dismissed. The ongoing right of Uber and similar businesses to dismiss workers without redress is in my view the real headline. As I suggested in the last blog, current UK employment law principles do not really deal with the circumstances highlighted by gig economy work relationships, and perhaps the ongoing appeals will be met at the same time by changes to the law through new legislation.
Finally, does this matter to most of us going forward. In a recent study in the USA by Intuit it was predicted that by 2020, 40% of American workers would be classed as independent contractors. If the UK follows the same trend the Uber case and how it progresses will matter to us all, with classic employment situations continuing to diminish in importance.
Author: Stephen Pinder, Head of Employment Law, EAD Solicitors LLP