Last week, 6 UK Supreme Court judges unanimously supported the employment tribunal ruling from October 2016, that Uber drivers should be classed as ‘workers’, with associated rights to receive the minimum wage and paid holidays.
The Guardian article makes the point that this ruling could well have ramifications well beyond the Uber business, which has c.40,000 workers involved in the UK. It points to:
(This case) “is one of about 1,000 cases challenging the self-employed status of gig-economy workers, including action against the minicab firm Addison Lee and the delivery groups Citysprint, Excel and eCourier.”
The company argument has been that its drivers are independent, self-employed people and therefore not entitled to rights allocated to those classed as ‘workers’, such as minimum hourly wage and a workplace pension.
The Supreme court took the clear and strong view that any attempt by organisations to draft contracts attempting to disguise the real nature of the engagement were unacceptable, unenforceable and could not circumvent basic employment protections.
The unanimous court view was critical of the contract form that drivers had been asked to sign, stating (the contracts) “ can be seen to have as their object precluding a driver from claiming rights conferred on workers by the applicable legislation”.
The judges concluded that the level of control exerted over the drivers (through the technology and how it was used, including setting fares and passenger destinations being withheld until the client was picked up) meant that they should be classed as ‘workers’.
This ruling has two main points for consideration of interim tax status:
- The written contract is not the key point to consider for determining tax (and legal engagement) status.
- Practical level of control is a fundamental element in the decision making process.
Terminology being used builds on the Taylor report and associated work, referring to the self employed (no employment rights), workers (some basic employment rights) and employees (full weight of employment protection law).
The implications of this ruling for tens of thousands of people and a number of engaging organisations is significant. Given the circa 5 million ‘freelancers’ in the country, there is likely to be a lot of fresh consideration being given to contract forms and their implications.