Uber loses right to classify UK drivers as self-employed

19th February 2021 Employment

On Friday 19th February 2021, the UK Supreme Court handed down its long-awaited decision in Uber BV and others v Aslam and others and confirmed that Uber drivers are ‘workers’ for the purposes of, inter alia, holiday pay and the national minimum wage.

This landmark decision will shape the future of gig economy working practices in the UK, which have been prevalent in the past decade, and have been so vital recently during the Covid lockdown.

The case will now return to the Employment Tribunal, which will decide how much compensation drivers are entitled to. It has been estimated that tens of thousands of Uber drivers could be entitled to an average of £12,000 each in compensation.

What this means for businesses

Although the specific findings will only apply to Uber, it is expected that businesses will now look to review their contractual terms to reduce the risk of their so called self-employed contractors bringing similar claims. With this in mind, the impact of the judgment may also influence the way in which some businesses engage staff and businesses may be required to review their workforce models if they cannot afford the financial implications of staff being categorised as workers and the additional payments they are entitled to.

What businesses can learn from this

The Uber case will not provide a single test to determine whether so called self-employed contractors are in fact workers but it will provide authoritative guidance for those businesses operating in the gig economy. The case shows that Employment Tribunals will look beyond the contracts in place and instead will focus on the reality of the relationship in practice when determining employment status. Uber BV and others v Aslam and others highlights that employment status is an extremely complicated issue and the five-year battle over the status and rights of Uber drivers will no doubt be a wake-up call for many businesses. 

If you need advice or have any queries about dealing with any employment status issues , please contact Paul Chamberlain or another member of the employment team at JMW Solicitors LLP on 0345 241 5305.

This note is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice.

JMW Solicitors is a Limited Liability Partnership. The copyright in this note is owned by JMW. Any reproduction of this article should be credited to JMW. All rights reserved.

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Lauren Scott is a Trainee Solicitor located in Manchesterin our Trainee Solicitors department

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