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In 2016, a number of Uber drivers sought to bring a tribunal claim against the company for failure to pay national minimum wage, failure to provide paid annual leave and whistleblowing detriment. Uber argued that these drivers were not entitled to bring such a claim as they were not ‘workers’ within the meaning of section 230(3)(b) Employment Rights Act 1996 (and the relevant provisions in the Working Time Regs and National Minimum Wage Act).

Uber sought to argue, instead, that the company provided their services through drivers under a contract that was concluded between the driver and the passenger for each journey. Therefore, the company said that Uber was merely an ‘agent’ in the transaction between the driver and the passenger.

Having considered those arguments, the Supreme Court emphasised that the determination of ‘worker’ status, for the purpose of the claims pursued, was a question of statutory interpretation, as opposed to contractual interpretation. In the court’s view, it would be inconsistent with the purpose of the legislation relied on to treat the terms of a written contract as the starting point in determining whether an individual falls within the definition of a ‘worker’. The analysis of whether an individual was a ‘worker’ therefore involved an examination of the reality of the situation and what was happening in practice.

In this particular case, the court looked at five key factors which had been highlighted by the employment tribunal and that were relevant to that statutory interpretation to reach the conclusion that the drivers were workers.

The factors were:

  1. Uber fixed the rate paid to the drivers;
  2. Uber dictates the contractual terms (drivers are required to accept Uber’s standard form of written agreement);
  3. Uber requires drivers to accept work once logged on (and logs out anybody who rejects work);
  4. Uber exercises a significant degree of control over the way in which the service is delivered; and
  5. Uber restricts the driver’s ability to communicate with passengers.

The court found, when looking at these factors, that the service performed by the drivers through the app was very tightly defined and controlled by Uber. It is established law that where one party exerts a high degree of control over another, that is indicative that the controlled party is, in fact, a worker.

Having established that the drivers were workers, the court went on to determine that the drivers were ‘working’ during the period they had their apps switched on.

Not only does this case have huge implications for Uber drivers across the country who are now able to pursue claims for national minimum wage and unpaid annual leave, but it also provides helpful clarification on the correct approach for determining employment status.

The Supreme Court has made it clear that whilst contractual provisions will be taken into account, it is the reality of the relationship that will be an important factor in determining whether an individual is a worker. Employers and service providers alike should, therefore, ensure that as well as having tightly drafted contracts, they are conscious about what is happening in practice, paying careful attention to the level of control they are exerting over those who are performing tasks for them.

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