The employment status of individuals has become an issue with which employment tribunals have been grappling.
Employers need to be aware that the courts will look behind written agreements and will check whether the terms reflect the true agreement between the parties.
This was made clear in a Supreme Court case in 2011.
More recently, a tribunal has ruled that a cycle courier was a “worker” (an employee) and was not self-employed. This decision was reached despite the existence of terms stating they were self-employed contractors.
The tribunal looked at the true relationship between the parties when making its ruling.
A similar approach was adopted in the case of RS Dhillon, where a tribunal considered the written terms and the working environment and treatment of the individuals concerned.
It concluded that the drivers were employees on short-term contracts and not self-employed, as had been alleged.
It is clear from these cases that employment status is difficult to classify. Employers need to ensure that the written terms of employment reflect how they are actually operating their business.
Uber ruling has far-reaching consequences
A ruling by an employment tribunal over the status of Uber drivers will have far-reaching consequences on the ‘gig economy’.
The tribunal concluded Uber drivers are “workers” within the meaning of the legislation, and are therefore entitled to a whole host of employment rights.
The case was brought by London-based Uber drivers and has resulted in a landmark decision. It means drivers are now afforded greater protection, such as entitlement to the national minimum wage and holiday pay.
The judgment makes clear that Uber drivers are not self-employed, but that they work for Uber. The taxi drivers fall within the definition of a “worker” when:
- They have the App switched on;
- They are within the territory they are authorized to work in;
- They are able and willing to accept assignments.
The ramifications of this decision will be felt further afield, with all firms which take on self-employed workers having to carefully consider the terms on which they operate.
Uber has indicated its intention to appeal, and we await further clarification on this issue.
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