On Friday, the Supreme Court confirmed the Court of Appeal’s earlier judgment by finding that Uber Drivers are in fact Workers and that when the Uber Drivers had the app switched on, were in area and were ready to accept rides then this should be classed as Working Time.

When handing down the oral Judgment, LCJ Leggatt set out some of the key facts leading to the Court’s decision to dismiss Uber’s appeal. Uber had argued that they simply provided an app offering the Drivers a platform to book rides and that Uber simply took a percentage of the fare.

Control, subordination and dependency

These were key themes identified in the judgement. The key facts set out by LCJ Leggatt were:

1. Ride is booked through the Uber app and Uber sets the fee to be charged; the Driver cannot dictate fee that is set.
2. Terms are imposed on Drivers; Drivers are not able to negotiate the fee.
3. When logged on, Uber monitors Drivers rate of acceptance and decline. Uber will log Driver off for 10 minutes as penalty if their acceptance rate falls below a certain level.
4. Passengers are asked by Uber to rate their Driver; if Driver fails to maintain an average rating, they are sent series of warnings.
5. Uber actively restricts level of contact between Drivers and passengers.

The Court also extended the definition of working time and was influenced by the fact that when the Driver has the app switched on they were under some sort of obligation to accept trips and suffered a form of penalties for not accepting them.

The Supreme Court was not persuaded that the contract between the Drivers and Uber clearly described the relationship as the Driver being a Self Employed Independent Contractor reflected the reality of the relationship. Lord Leggatt’s said in response to this:

“The efficacy of such protection would be seriously undermined if the putative employer could by the way in which the relationship is characterised in the written contract determine, even prima facie, whether or not the other party is to be classified as a worker. Laws such as the National Minimum Wage Act were manifestly enacted to protect those whom Parliament considers to be in need of protection and not just those who are designated by their employer as qualifying for it.”

This gives a clear message to courts not to focus on what the contract states but to look at the reality of the relationship and not simply the wording of the contract.  The case shifts the Court’s focus from what is stated in the contract to the relevant statutory provision. As one commentator put it:

“The headline point is that when you are deciding whether a particular individual is a worker or not, you do not start with the contract and see whether that is the sort of contract a worker would have. Instead, you start with the statutory provision – for example the right to the minimum wage – and see whether they fall into the statutory definition of a worker ‘irrespective of what had been contractually agreed’. Whether or not an individual is a worker is primarily a question of statutory interpretation not contractual interpretation.”

See Darren Newman Article End of Road for Uber

 The Supreme Court found that the very purpose of these laws is to protect vulnerable workers and that it would not allow that to be avoided through contractual terms.

In reality it found that Uber tightly defined and controlled Drivers’ work; the Drivers had no ability to be entrepreneurs and could only earn more, by working more. The Drivers were not acting in an agency role, which had been argued by Uber.

The case will have huge ramifications on who is classified as a worker. For this case, it means the Drivers are now entitled to National Minimum Wage, holiday pay and rest breaks. The case will also impact the assessment of who is a worker under IR35 that comes into force of IR35 on 6 April 2021.

The full Judgment can be found here