Cab-hailing app Uber is facing a legal challenge from drivers who say the firm is acting unlawfully by not offering holiday and sick pay. An employment tribunal hearing started yesterday in what has been called the ‘UK employment law case of the year’.
We asked ELAS consultant Emma O’Leary, who specialises in employment law, to take a look at the case.
“Employment status has long been the greyest area of employment law. Is someone self employed or are they really an employee, or a worker?
“Even where both parties believe and want to have a self employed relationship, an Employment Tribunal and HMRC see it differently. Their decisions can have far reaching implications for the employee’s rights and tax liabilities, as well as opening the flood gates for other similar claims against companies operating this type of arrangement.
“This is why the Uber case has employment lawyers glued. The drivers are claiming that they are workers because the terms and conditions of the arrangement means that Uber has such a degree of control over them that they cannot be said to be self employed, and therefore they are entitled to national minimum wage, holiday pay etc. It should be noted they are not arguing that they are employees, who would have increased rights above those of a worker. Uber will seek to argue that they simply put the drivers in touch with customers but the drivers are their own boss. They will say that they are simply a technology company who do not provide the services themselves – so the nature of that will be analysed too.
“Such is the difficulty with employment status claims. They require scrutiny of all the facts and circumstances and questions need to be asked, including: Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it? Can they work a set amount of hours?
“Answering yes to any of these might be more indicative of an employee or worker status, whereas someone is more likely to be classed as self employed if they provide the main items of equipment they need to do their job, agree to do a job for a fixed price regardless of how long the job may take or if they regularly work for a number of different people.
“Companies often fall into the trap of considering someone to be self employed just because the ‘contractor’ is responsible for their own tax and NI – this on its own is not enough to prove there is no employment relationship. It’s essential to ensure that you have the correct documentation reflecting the genuine position between you and the contractor, and that the circumstances and facts of their work for you in practice do not form an employment relationship.
“However this case goes, rest assured it will have a huge impact on both parties and set an important employment law precedent.”