Legal

Will the Uber case be a defining moment for the gig economy?

15 Oct 2020 By David Sheppard

David Sheppard looks at the implications of a long-awaited Supreme Court ruling on the employment status of the firm’s drivers

Employment status disputes have been making news in recent years, with Uber BV v Aslam and others being the headline case since it accelerated to the Supreme Court. It continues to be a troublesome issue, with a long stream of cases on employment and worker status flooding the employment tribunals. 

Status disputes of this kind arise in the gig economy as a result of individuals trying to assert basic rights, such as minimum wage, holiday pay and sick pay, while employers deny them, claiming that their employment status does not entitle them to these protections. There are three employment statuses that confer different legal protection: employees, who enjoy the full suite of available employment rights; workers, who only enjoy basic rights; and third-party contractors, who receive very little statutory protection.  

In the Uber case, the claimants claimed that while using the Uber app to gain fares, they were ‘workers’ of Uber and were therefore entitled to the minimum wage, paid leave, and other legal protections. But Uber argued that drivers using their app service were independent third-party contractors and, as such, were not entitled to the same legal protections as workers. Initially, the employment tribunal found in favour of the claimants, stating that they were workers when:

  • they had the app switched on;
  • they were within the territory in which they were authorised to work; and
  • were able and willing to accept assignments.

Following successive appeals by Uber, the case now sits with the Supreme Court awaiting a reserved judgment. 

The case is at the centre of an ongoing conflict within the so-called ‘gig economy’. Around five million people in the UK are employed in the gig economy, being services and engagements based on short-term and irregular contracts or freelance work, rather than the more regular contract of employment. The gig economy is praised for its flexibility, but also heavily criticised for its inherent job insecurity, lack of protections for the workforce, and the ability to be exploited by employers. 

The UK government tried to bring certainty to this sector by commissioning the Taylor Review in 2017, which prompted its Good Work Plan. The Good Work report made recommendations on how to restructure the UK labour market, suggesting the need for a greater balance between flexibility and employment rights and more security and certainty for gig economy workers. 

One of the primary recommendations of the report was to codify the legal test to establish a worker’s employment status, setting out the key principles which should be applied when making decisions to that effect. The report suggested that this could be set out in primary legislation, with secondary legislation providing additional details that could be amended as society’s expectations around employment rights develop.

The Supreme Court’s Uber judgment will go a long way to achieving this, by stating the law as it sees it, and what is needed to be considered an employee, worker and third-party contractor. It is anticipated it will seek to summarise the key principles which have been built and evolved through case law over 50 years. 

Whether the principles set out in the judgment will be codified into legislation remains to be seen, but is expected to be the defining judgment in status cases for years to come. It will certainly be relevant to the future shape of gig economy working practices, which have been prevalent in the past decade, and have been so vital recently during the Covid lockdown. 

David Sheppard is an employment lawyer at Capital Law

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