Employment status: Supreme Court unanimously dismisses Uber's appeal

Background

Uber provides taxi drivers with access to its ride-hailing app to enable them to connect with and provide driving services to passengers using its innovative business model. Uber has maintained throughout the litigation that it acted as an agent for its drivers. The tripartite agreement between Uber BV, the drivers and their passengers was clear that the contractual arrangement for transportation services was between the Uber drivers and their passengers, not Uber.  Although there was no obligation to accept work, once logged onto the app the driver was considered able to accept bookings.  If a driver continually failed to accept bookings he or she could be penalised and even have the app suspended. In the Employment Tribunal and the Employment Appeal Tribunal Uber was unsuccessful in its arguments that it was simply a technology platform facilitating the provision of taxi services between passengers and self-employed drivers.  The Court of Appeal by a majority upheld the Employment Appeal Tribunal's decision and found that the drivers were in fact workers.  Lord Justice Underhill disagreed providing a dissenting judgment.  Uber appealed to the Supreme Court.  

Supreme Court 

The Supreme Court has unanimously dismissed Uber’s appeal. 

Is a driver a worker?

The judgment set out five aspects of the findings made by the Employment Tribunal which justified its conclusion that the drivers were workers:

1. In circumstances where the ride was booked through the Uber app, Uber set the fare and drivers could not charge more than the fare calculated by the app.  Uber dictated how much the drivers were paid.
2. The contract terms on which drivers performed their services were imposed by Uber and drivers had no say in them. 
3. Once a driver had logged onto the Uber app, the driver's choice about whether to accept requests for rides was constrained by Uber.  For example, Uber monitored the driver's rate of acceptance (and cancellation) of trip requests and drivers were penalised if too many trips were declined or cancelled. 
4. Uber exercised significant control over the way in which drivers delivered their services.  For example, passengers were asked to rate drivers on a scale of one to five after each trip.  If drivers were unable to maintain the required average they would receive a warning.  If the drivers rating did not improve, eventually they would have their relationship with Uber terminated. 
5. Uber limited communication between the passenger and the driver.  The restrictions in place in effect meant that the driver could not establish any relationship with a passenger beyond the individual ride. 

The principle established by the Supreme Court in Autoclenz Limited v Belcher that it is necessary to look behind the contract was also considered.  The Supreme Court gave further guidance that the general purpose of the employment legislation invoked by the claimants in the Autoclenz case, and by the drivers in this case is to protect vulnerable workers from being:

• paid too little for the work they do;
• required to work excessive hours; and
• subjected to other forms of unfair treatment (such as being victimised for whistleblowing).  

The rights asserted by the drivers were not contractual in nature, but created by legislation.  It would be inconsistent with the purpose of this legislation to treat the terms of a written contract as the starting point in determining whether an individual falls within the definition of a "worker".  

When are the drivers "working" for Uber?

The Supreme Court went on to find that the Employment Tribunal was also entitled to find that time spent by the drivers working for Uber was not limited to periods when they were actually driving passengers.  The drivers were working for Uber during any period when they logged into the Uber app within the territory in which the driver was licensed to operate and was ready and willing to accept trips.  

Comment 

The long awaited judgment from the Supreme Court is perhaps unsurprising and marks the end of the road for Uber in this litigation.  Employment status cases have continued to hit the headlines in recent years, with a predominant trend of worker status findings. 

With the onset of the pandemic businesses have had to diversify and find new ways of working. Innovative, technology based businesses with an ability to flex up or down based on demand undoubtedly play a key part in the future prosperity of the UK.  Businesses will need to plan carefully to ensure labour supply is budgeted appropriately in light of the latest case law.  

If you need any assistance with the issues raised in this update please do not hesitate to get in touch.