A recent decision of a UK Employment Tribunal could have
significant implications on Australia's Uber Company, and will
likely have a run-off effect on Australia's rapidly growing
The Central London Employment Tribunal has given a landmark
ruling that Uber drivers should be treated as employees, entitling
them to statutory protections including the National Minimum Wage
and holiday pay in the UK.
The case was initiated against Uber by the GMB Union on behalf
of two Uber drivers. It examined the threshold requirements as to
when a worker is an independent contractor or employee.
Contractor or Employee?
In determining whether the drivers were employees opposed to
independent contractors, the Tribunal examined Uber's business
model in detail, considering the whole working arrangement as it
operated in reality, rather than Uber's contracts, which the
Tribunal described as "fiction" and "twisted
Despite drivers' having rights and freedoms consistent with
that of independent contractors, such as the ability to work for
other organisations, having to cover the cost of their vehicles and
being self-employed for tax purposes, the Tribunal found a number
of factors pointed to an employee-employer relationship. In
Interviews and recruits drivers.
Requires drivers to accept trips and/or not cancel trips, and
enforces the requirement by logging off drivers who breach those
Sets the route and fixes the fare and the driver negotiate a
higher sum with the passenger.
Imposes a number of conditions on drivers (such as the
acceptability of their vehicle) and controls them in the
performance of their duties.
Subjects drivers through the rating system to what amounts to a
performance management/disciplinary procedure.
Determines issues about rebates and handles complaints by
passengers, including complaints about the driver.
In summary, the Tribunal concluded that Uber is essentially a
taxi service which employs drivers to provide the service to its
users, which, in a number of ways, Uber controls.
Uber has said it will appeal the decision.
What does this mean for Australia?
This judgement is expected to have significant implications on
start-up companies effectively utilising Uber's "gig"
economy business model, where companies use apps and the internet
to match "customers" with consumers.
The ruling is a reminder for employers to exercise caution when
engaging independent contractors. If a contractor has some or all
the features of an employee, it is likely that you will need to
review your arrangements. You cannot simply 'classify' a
worker as a contractor to avoid providing them their full rights as
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employer's duty is very high and can include engaging experts to inspect things such as stairways for latent defects.
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