U.K.: Uber Ruling Fails to Clarify How Government Classifies Workers

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By Ali Qassim

Nov. 23—A U.K. ruling that drivers working for Uber Technologies Inc. are entitled to basic workers’ rights has not clarified “in any way” how British employers should classify workers as employees or contractors, according to a senior employment attorney.

Other employers in the gig economy should be wary of drawing too many immediate conclusions from the Central London Employment Tribunal’s recent decision, Martin Warren, a partner and head of the HR practice group at London-based Eversheds told Bloomberg BNA.

The CLET ruled Oct. 28 that Uber should grant two of its drivers such employee rights as minimum wage and minimum paid vacation.

Plaintiffs’ attorney Nigel Mackay, associate solicitor at London-based Leigh Day, said the decision confirmed that Uber’s drivers “are not self-employed but that they work for Uber as part of the company’s business.”

Are Workers Employees or Contractors?

But Warren argues that the ruling has not necessarily shed any additional light on exactly how U.K. companies are supposed to determine whether a worker is an employee or an independent contractor.

Currently, U.K. employment law divides those who work for someone else into three main categories, Warren said, “with ‘employees’ at one end of the scale, people who carry on a profession or business on their own account and provide work or services for clients or customers at the other and in between a group usually referred to as ‘workers.’ ”

“Employment and worker status are the passport to a range of statutory rights,” Warren said, “although the full array is reserved for those categorized as employees. The boundaries between the three groups are, however, largely invisible: there are few hard and fast rules for distinguishing between the categories and many cases are decided as a matter of overall impression.”

Shedding Light

Warren emphasized that the Uber tribunal’s decision “is an example of such a case and does not clarify the law in any way.”

Uber has appealed the ruling, Warren said, and the appeal tribunal is “likely to focus in more detail on the legal aspects of the tests for distinguishing between workers and other self-employed contractors.”

Warren concluded that the “litigation could yet shed light on some of the trickier aspects of the law in this area, although with the appeals process potentially running on for years, any final ruling will be some distance away.”

‘New Working Models'

According to Maria Ludkin, a legal director at trade union GMB, the Uber ruling “will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife.”

Warren told Bloomberg BNA that “new working models emerging from the digital, on-demand economy have given rise to a wave of litigation recently in the UK, as elsewhere in the world. This month, for example, another tribunal will hear the first of a group of claims brought against a number of cycle-courier firms.”

Warren warned, however, that “the fact that the Uber claimants have won their claim for worker status does not mean that claims brought by others who work elsewhere will meet with the same success. Indeed it is notable that the tribunal did not doubt that Uber could have, in principle, created a business model that did not involve the drivers having worker status.”

Regarding the impact on other gig workers, Warren said, that “each case will depend on the specific terms and arrangements between the individual and the company they work for.”

“Nevertheless, other firms who rely heavily on the ‘on demand’ freelance workforce will have noted the tribunal’s robust approach and will be watching other cases like this keenly for any emerging trends that could significantly impact their business model financially. The appeal tribunal’s decision in the Uber case will also be one to look out for.”

To contact the reporter on this story: Ali Qassim in London at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The Central London Employment Tribunal’s Uber ruling is available here.

For more information on British HR law and regulation, see the U.K. primer.

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