HR · 10 November 2017

Future of gig economy in doubt as Uber loses appeal against landmark ruling

The appeal was made following a ruling in 2016 classifying two Uber drivers as regular employees
The appeal was made following a ruling in 2016 classifying two Uber drivers as regular employees

On-demand taxi app Uber has lost its appeal against a landmark ruling regarding the employment status of its drivers, a decision which could potentially change the face of Britain’s gig economy.

The initial case was heard in October 2016, when two drivers won the right to be considered regular employees by the company, with entitlement to employment rights such as the minimum wage, annual leave and sick pay, rather than working as self-employed.

Having challenged the ruling at the Employment Appeal Tribunal (EAT) in London on the grounds that drivers would lose the “personal flexibility they value”, Uber has now lost the subsequent appeal, which could drastically change the way the company – and those with similar business models – operates.

In response to judge Jennifer Eady QC’s decision, Tom Elvidge, Uber UK’s acting general manager, argued that the “gig” model had existed long before the app.

He added: “Over the last year we have made a number of changes to our app to give drivers even more control. We’ve also invested in things like access to illness and injury cover and we’ll keep introducing changes to make driving with Uber even better.”

Read more: What rights do gig economy workers really have?

Detailing how the ruling could affect other firms dependent on on-demand workers, Alan Price, employment law director at Peninsula HR, said the decision was a “further indication” that employers might need to reassess their treatment of staff.

“Since employment tribunal fees have been abolished, there is no deterrent for individuals to challenge their given status,” he added.

Expressing disappointment at the decision, Chris Bryce, CEO of the Association of Independent Professionals and the Self Employed (IPSE), said the ruling demonstrated a “fundamental lack of clarity” of what it means to be self-employed in 2017.

“It is astonishing that the employment tribunal granted the two drivers worker status. A key element of being a worker is having to turn up for work even if you don’t want to. This is clearly not the case with people who drive through Uber – they choose when and how long they work for by logging on or off the app,” Bryce said.

However, it is believed that the case could continue. During the EAT hearing it was suggested the company could overlook the Court of Appeal and take the case directly to the Supreme Court.

If they appeal goes further, Enrique Garcia, an employment law consultant with the ELAS Group, said a “flood of similar claims” from gig economy workers would surface.

“It’s a case that has far reaching implications and will set an important employment law precedent,” Garcia added.

A number of other companies using on-demand gig workers are also facing appeals in the coming months. Delivery firm CitySprint is appearing at the EAT in November and Pimlico Plumbers is set to appeal a separate ruling at the Supreme Court in early 2018.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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