Many of you will be familiar with Uber, the hugely successful
app which allows smartphone users to hail a driver using mobile
location software. Millions of users have embraced the technology
for the convenience it provides, satisfying an ever increasing
demand for a quick and hassle-free way of arranging travel.
Last Friday afternoon (28 October 2016), an employment tribunal
ruled that two Uber drivers in question are 'workers' as
opposed to self-employed contractors.
The case was brought by the GMB trade union following claims
that Uber disregarded the basic employment rights that should be
afforded to its drivers. The tribunal heard from the two Uber
drivers, whose case was that Uber failed to ensure its drivers were
provided with the national minimum wage and the minimum amount of
Uber has always stood by its position that its drivers are
self-employed contractors, as opposed to 'employees' or
'workers'. The tribunal's ruling that the drivers are
workers means that certain employment related rights are triggered,
including the national minimum wage, rest breaks and a minimum
amount of paid holiday.
Needless to say, the decision is unwelcome news for Uber and
others operating in the 'gig economy'. Uber now faces
having to fund these benefits for its drivers. The decision is also
likely to be displeasing for users of Uber, who may well see
prices rising (and a less stable service) as a result of the
additional funding that is required.
Whilst some critics have supported the decision, especially with
regard to the national minimum wage, it is worth noting the
calculation of their hourly rate fluctuates and largely depends on
how long the drivers stay logged in to the app and how many jobs
they accept/cancel on a particular day.
The Regional General Manager of Uber in the UK confirmed that
Uber will appeal the tribunal's decision, stating, "Tens
of thousands of people in London drive with Uber precisely because
they want to be self-employed and their own boss ... The
overwhelming majority of drivers who use the Uber app want to keep
the freedom and flexibility of being able to drive when and where
they want". Indeed, Uber has supported flexible working and
does not require its drivers to log in for a minimum number of
hours or require them to work solely for Uber.
The ruling of the hearing will only affect the drivers named in
the case, however the challenge to Uber's business model is
likely to cast a shadow of uncertainty on drivers and users alike,
for as long as what is widely thought to be a drawn out appeals
process takes to run its course. In the meantime, we await with
anticipation the outcome of what we think will be the first (but
not the last) appeal in this case.
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In SSE Generation Limited v Hochtief Solutions AG and another decided on 21st December 2016, the Court of Session in Scotland considered a contractor's potential design liability under the NEC Form of Contract.
Case law concerning the Agency Worker Regulations remains limited. We recently advised a recruitment business involved in a dispute with a "temp" and a hirer regarding who was liable for an alleged breach of AWR Regulation 5.
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