Following its Supreme Court defeat last month, Uber has announced that it will treat its UK drivers as workers. This means that Uber will:
· Pay its drivers at least the National Living Wage, due to rise to £8.91 on 1 April 2021
· Pay holiday pay based on 12.07% of driver earnings
· Automatically enrol all drivers into a pension scheme, with contributions being made from Uber and the drivers.
Since 2016 when its legal battle with drivers began, Uber had consistently maintained that it was a third-party booking agent and that its drivers were self-employed. The Supreme Court, however, ruled that the drivers are not self-employed and are in fact ‘workers’. It found that the drivers had a relationship of “subordination and dependency” with Uber such that they should be classified as workers and that they are entitled to minimum legal, holiday and pension rights.
Under UK employment law there are 3 kinds of employment status: employee, worker and self-employed.
· Employees have the greatest degree of protection and are entitled to all statutory employment rights, including unfair dismissal, statutory redundancy payments, sick pay, and family leave and pay.
· Workers have fewer rights than employees but are still entitled to the national minimum wage, paid holiday and protection against unlawful discrimination.
The court’s decision is expected to have far-reaching consequences for the ‘gig’ economy where bogus self-employment is rife, and whilst Uber has said that these changes will not result in higher fares for its passengers, going forward we are likely to see these additional costs passed onto consumers in industries where flexibility is at the heart of the business model.
This may also not be the end of the long-running dispute with Uber saying that it will calculate earnings based only on the time that a driver is assigned to, or travelling with, a passenger. Waiting time for customers would not be included, even though an earlier lower court ruling stated that “working time” should begin from the moment a driver logs onto the app and is ready to accept a trip.
Please get in touch with your usual 3CS contact if you would like further information on any of the above, or how this decision may affect your business.
