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Uber and the ‘gig economy’

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Article from Peninsula Business Services on the recent case involving Uber and the ‘gig economy’.

A gig economy is an environment in which temporary positions are common and organisations contract with independent workers for short-term engagements. The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy. The article therefore makes an interesting piece.

With the ‘gig economy’ being the hot employment law topic over the course of 2016, we followed the recent Uber case with interest. Here are some details from the recent tribunal case, where it was ultimately decided that Uber workers are not self-employed, but are in fact workers.

A group of drivers, supported by the GMB union, brought claims against Uber saying that they were being denied basic employment rights because they were not self-employed. Uber has always denied this for the following reasons:

  • They claim that they’re nothing more a tech platform
  • They simply supply a smartphone app for drivers to log on and connect to customers
  • They only charge commission for use of the app
  • Drivers are either independent contractors or self-employed

In a rather scathing judgement, the tribunal found Uber’s contention that the drivers were in business on their own account and had their own customers, was “ridiculous”. They gave the following reasons for reaching this conclusion, stating that Uber:

  • Exerted a significant degree of control over their drivers
  • Fixed the price of the job
  • Indicated the preferred route
  • Took the financial impact of any complaints
  • Retained all customer information apart from client name
  • Sanctioned drivers for cancelling jobs

Importantly, the tribunal also found that the written terms governing the relationship between Uber and the drivers didn’t reflect what actually happened in reality. Regardless of the fact that drivers were described in documents as ‘partners’, in practice they were really workers.

The worker decision means that drivers should be granted employment rights including:

  • Minimum wage
  • Paid holiday
  • Minimum rest breaks
  • Maximum 48-hour average working week
  • Pension auto-enrolment

What happens now?

Not only will Uber have to financially provide these rights, but they may also be forced to make good on any losses suffered by drivers because they were wrongly classed as self-employed.

Uber have confirmed that they’ll appeal the decision, so this may not be the final word on this case. However, the law the tribunal applied is not new and status cases will apply the same law – although the facts of each case could lead to a different decision.

A similar case is already lodged in the tribunal system against the cycle courier firm City Sprint, and the government has commissioned a review into ‘modern employment’. This means that the issue of status, and the gig economy, is likely to still be making headlines for years to come.

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