Uber ruling: ‘control comes at a cost’ for UK gig employers

Out-Law News | 25 Feb 2021 | 10:55 am |

Stuart Neilson tells HRNews about the implications of the Supreme Court’s ruling in Uber v Aslam
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  • Transcript

    As you will have seen in the news, last week the Supreme Court unanimously ruled that Uber drivers are workers in a landmark judgment with significant implications for the gig-economy. The Court dismissed Uber’s appeal against the decisions of the employment tribunal, EAT and the Court of Appeal and rejected the arguments put forward by Uber that the drivers were self-employed. As workers they now entitled to basic rights including paid holiday, rest breaks and the national minimum wage. The case now returns to the employment tribunal to determine the extent of the drivers' entitlements. The Supreme Court based its decision on the degree of 'control' exercised by Uber over the service provided by the drivers to their passengers. It also found that the drivers were working whenever they were connected to the Uber app and available for work in the area in which they were licensed to operate, and not only when transporting passengers. The Supreme Court’s ruling brings an end this long and bitter litigation which began when two drivers, James Farrar and Yaseen Aslam, took Uber to an employment tribunal in 2016 on behalf of a group of about 23 others. The two of them were outside at Supreme Court last Friday when the decision was made public. Both of them spoke to Channel 4 News:

    Video clip from Channel 4 News

    This case has been followed very closely by employers in the gig economy, especially those with similar business models to Uber’s which have app-based platforms. It is litigation we have been following closely too, of course, because we have a number of clients that will be affected by this decision to a greater of lesser extent. Stuart Neilson has been looking closely at the Supreme Court's reasoning and he joined me by video-link from Glasgow:

    Stuart Neilson: “I think the interesting thing about this decision is you can kind of break it down into two parts. There’s really an issue in the first place about the actual detail of the case, the terms and conditions, all that kind of thing, but actually, I think what's more important is the way that the Supreme Court went about reaching its decision and taking what they call the ‘purposeful approach’ to interpreting the legislation because what they said at the end of day was this is a case that is essentially about the rights of workers and rights of workers in relation to whistleblowing, in relation to holiday pay and in relation to national minimum wage and they said what is the purpose of that legislation? The purpose is to protect workers. How do we best do that? They said we best do that by looking for that purpose and by, effectively, ignoring, if you like, the attempts, by Uber in this case, to put in place lots of detailed terms and conditions which might suggest the position is other than it is and so what we’ve got to actually look at is what actually happens in practice. So that was the key thing that they focused on, this purposeful interpretation and getting it protecting workers rights by looking at the purpose behind the legislation and, how you get there, is by effectively putting to one side all the clever terminology that Uber might have used in their documentation and looking at what happened on the ground.”

    Joe Glavina: “The Supreme Court said the relationship between Uber and the drivers was one of ‘subordination and dependency’. That probably describes a lot gig relationships out there, especially those with app-platforms?"

    Stuart Neilson: “I think the key thing is it comes down to this issue of control. So what do we mean by control? What is striking about the Uber case - Uber were obviously arguing we are simply providing a technology platform and these individuals are self employed individuals, they control what's happening here. The reality when you went behind the jargon and everything else that was used, was the reality was that the control very much resided with Uber in terms of how these individuals worked and when they worked, and how they could earn money, that control all sat with Uber. So if you're someone who is operating a technology platform and you’re looking to avoid providing workers’ rights to the extent that have come through in the Uber case, then I think what you have to have is a situation where you don't have that level of control. So you can't have your cake and eat it. You can't have the control and expect not to then have the impact of workers’ rights. It's about control and there's an interesting comparison that they drew in the Supreme Court between the kind of technological platforms that people use for booking accommodation and what was happening with Uber because in that scenario where you're booking accommodation, yes, there's a technology platform being used but the people who are using that to sell their services, and their accommodation, still retain a really high degree of control over how they go about doing that which is absent in the case of the taxi drivers in Uber. So it comes down to control and I think you really have to look at what is the level of control you're trying to exercise here.”

    Joe Glavina: “Can I ask you about what employers can do in practice to manage this risk. If it comes down to having to change the business model who would be involved in that exercise? HR, operations, lawyers, who exactly?”

    Stuart Neilson: “I think it is everybody because it goes to the root of your commercial model. So I think that you have to have the business people, the commercial people, the commercial operations people involved, HR obviously involved because there are lots of HR issues that arise, and then you undoubtedly want to take legal advice. The key thing is that you are consistent in terms of having a model in place that's reflected in the documentation and reflects what happens in practice. That's the key thing because I think where Uber fell down was that they had a model, and it was all nicely documented, but the documentation really didn't reflect what was happening in practice and that's one of the problems that they had. So I think the whole structure of how you operate is wrapped up in this and it's therefore really important that you've got everybody involved from the operations, the HR people, even the finance people as well because there's a massive impact in the financial side of things, and the lawyers, and you need to be consistent throughout the whole operation in terms of how this is going to work.”

    This is clearly a very important ruling – a landmark decision by the Supreme Court – and if you'd like to read the judgment you can - we have put a link to it in the transcript of this programme. Incidentally we will be coming back to this case in our next programme to consider the claims Uber now faces and the risks facing employers with a similar business model.

    LINKS

    Link to case report: Uber VB v Aslam and others (Supreme Court)
    [2021] UKSC 5