November 16, 2017

EAT confirms that Uber drivers are workers; and CAC says that Deliveroo drivers are not

On 10th November, the Employment Appeal Tribunal confirmed that Uber drivers were workers and not self-employed contractors, thereby entitling them to certain employment rights such as holiday pay, national minimum wage and rest breaks. In a decision handed down since then, the Central Arbitration Committee has decided that Deliveroo riders are not workers. ‎

The claim for worker status was brought against Uber in the employment tribunal on behalf of two representative Uber drivers.   Uber is comprised of various legal entities but essentially Uber BV (a Dutch corporation) owns the Uber app while Uber London (ULL) is tasked with ensuring Uber meets its regulatory requirements, accepts the bookings made on the app and deals with complaints made by passengers.  ULL holds the private vehicle operator licence and has no written contract with the driver.  Uber BV, on the other hand, has a contract with the driver (under which, for example, the driver agrees to pay a percentage commission on each fare accepted).

The tribunal decision

Before the tribunal, Uber argued that it was purely a technology company facilitating the provision of taxi services; it was not a transport business, and that rather than contracting with the drivers, each time a driver did a job, a contract was made between the passenger and the driver, making each driver a self-employed independent contractor in their own right. However, the tribunal found the arrangements and controls implemented by Uber pointed away from this; therefore the way in which the relationship was characterised in the written agreements did not reflect the reality of the situation and so could be disregarded.  Instead, the tribunal found that the drivers were incorporated into the Uber business providing transportation services, and were therefore workers and not independent contractors. Further detail on the factors taken into account by the tribunal can be found in our summary of the tribunal claim.

Evidence of integration into Uber's business and Uber's control over the drivers

Uber appealed the tribunal's decision, arguing that it was simply the agent for the drivers who themselves provided the transportation services.  As such, the tribunal should not have disregarded the written contractual documentation but should instead have taken into account the terms of the written agreements between the drivers and Uber BV and the passengers; these contracts, Uber argued, were inconsistent with the existence of any "worker" relationship.  This argument was rejected by the EAT which ruled that Uber was not simply an agent for the drivers. The essential question was when the drivers are working, who are they working for? The EAT found that the tribunal was entitled to conclude that there was in fact a contract between ULL and the drivers whereby the drivers personally undertook work for ULL as part of its business of providing transportation services to passengers in the London area.  The tribunal was entitled to take into account the scale of the Uber business (30,000 individual drivers in the London area of some 40,000 in the whole of the UK) and the evidence before it of how the drivers were integrated into it in finding that the drivers were workers and not independent contractors.  For example, the reality was that the drivers could not grow their businesses, had no ability to negotiate terms with passengers (save to agree a fare reduction) and had to accept work on Uber's terms.

Are the drivers "working" between assignments?

Although it was clear to the EAT that once a passenger was in the car, the driver was working and could be classified as a "worker", the position was less clear when the driver was "between jobs" that is when the app was switched on, the driver was in territory in which they were licensed to use the app and when they were ready and willing to accept trips.  Uber argued that at such times, the driver could equally be logged on to the app of a competitor and be ready and willing to accept their jobs.    The EAT considered that this fact wasn't fatal to their worker status or to that time being classified as working time because in reality once the Uber app is switched on, the driver is obliged to accept at least 80% of trip requests in order to retain their account status.  However, if the driver has entered into a similar agreement with another operator, they are unlikely to be at Uber's disposal in the same way so it will be a matter of evidence in each case whether and for how long the driver remains ready and willing to accept trips (and whether that time spent between assignments is time spent "working").

What this decision means for employers

This case will be of interest to other gig economy platforms and is one of many cases which have been brought so far in this area.  For example, claims against Excel, Addison Lee and City sprint have all been successful at tribunal level such that drivers or riders have been able to establish worker status for the purposes of entitlement to statutory holiday pay, national minimum wage and working time rights (eg rest breaks).     This decision is not notable for any change in the law; the EAT has simply applied established case law in this area.  It is also important to note that the facts relating to the Uber case are unique and the conclusions reached by the court are wholly dependent on those facts.   The EAT recognised this, stating explicitly that the tribunal was not denying the possibility of individual drivers operating as separate businesses, and as such, entering into direct contracts with passengers and therefore being independent contractors; but that was not the correct analysis in this particular case.   There is therefore no reason why, with a different business model (such as one which gives more control to the individuals to build their own business and take on the risks), even within a gig economy platform, the individuals might be classified as independent contractors.  But, as emphasised by this decision, unless the contractual terms reflect the reality of the operation, the court will disregard them when seeking to establish the true nature of the relationship between the app provider business and the individuals providing services to its business.    

The CAC decision that Deliveroo riders are not workers

Interestingly, in a decision handed down since the Uber decision, Deliveroo riders were found not to be workers because they have a genuine right to "substitution", meaning that they are allowed to get anyone else to deliver food on their behalf.  This decision was reached in the context of an application by the Independent Workers' Union of Great Britain to the Central Arbitration Committee (CAC) for union recognition.  

The CAC found that under the Deliveroo model, if a Deliveroo rider accepts a delivery, they agree to either do it themselves in line with the contractual standards agreed with Deliveroo, or get someone else to do it.  They can even abandon the job part way through by telephoning Deliveroo to let them know.  The rider is not penalised by Deliveroo for not personally doing the delivery, as long as the substitute complies with the contractual terms that apply to the rider.  The CAC concluded that this right to substitute was not a sham and accepted evidence that riders had used it in practice.  They concluded that this was fatal to the union's claim that the riders are workers.  The CAC noted that the factual situation in this case is very different to that of the Uber drivers, or Excel or City Sprint.  Deliveroo still faces an active employment tribunal claim by a group of 45 riders who say they are "workers" and are thereby entitled to certain employment rights such as the national minimum wage.

The gig economy and worker status were also considered by the Taylor Review which made recommendations including reviewing employment and worker status rules and making changes to how the national minimum wage operates for zero hours workers.  Click here for our separate update on this.

(1) Uber BV (2) Uber London Ltd (3) Uber Britannia Ltd v (1) Mr Y Aslam (2) Mr J Farrar (3) Mr R Dawson and Others

Independent Workers' Union of Great Britain v RooFoods Limited T/A Deliveroo