No matter how complicated the contractual arrangements, under current employment law, there are only three categories of individuals providing their services in the job market:
- An employee
- A worker
- A self employed independent contractor
The first two categories fall within the statutory definition of either “employee” or “worker” in Section 230 of the Employment Rights Act 1996. If you do not fall into either category, you are a self employed contractor.
In brief, a worker is not employed but provides his or her services as part of a business undertaking carried on by someone else. A self employed contractor carries on a professional business undertaking on their own account and enters into contracts with clients or customers to provide work or services for them.
The difference in status matters because workers are entitled to many of the statutory rights that employees are entitled to – such as paid holiday and the National Minimum Wage – but true self employed contractors are not. It is also important for several other reasons such as vicarious liability (click here to see my latest blog on this subject
Despite the statutory definitions, and extensive case law, the question of whether an individual is an employee, a worker or self employed remains difficult to answer in the individual case. The Courts have also found it impossible (or have been unwilling) to set down a clear and definitive set of criteria against which an individual’s status can be determined with certainty. The statutory definitions have also been criticised for not being appropriate to newer models of working such as those of the gig economy.
The outcome of the Uber case
In the Uber case, the Supreme Court agreed with the Employment Tribunal, and with the Court of Appeal, that Uber’s drivers are workers and not self employed independent contractors. This is despite the contractual documentation between Uber and its drivers making it clear that the drivers were self employed independent contractors.
As a result the drivers are entitled to paid holiday and to be paid at least the National Minimum Wage whilst “on call” when using the Uber Smartphone App. Uber argued, as it did in the Court of Appeal, that the Smartphone App was simply a technology platform which put drivers in touch with passengers. Uber acted only as an intermediary, providing booking and payment services through its technology platform and the drivers dealt with each passenger as an independent contractor.
The Supreme Court decided (as did the lower Courts) that the reality was the other way round: in effect that Uber ran a transportation business and the drivers provided their labour to Uber which, in turn, delivered its services to its clients, the passengers. The Court also held that the drivers were workers for the duration of time that they were in the territory for which they were assigned, logged into their Uber App and were willing and ready to accept rides. The only way the drivers could earn more money was if they worked longer hours.
The MyTaxi case – how does this differ from Uber?
The Uber decision has attracted a great deal of publicity but it remains a decision that rests on its own individual facts – as all these cases do. It is worth distinguishing it from the MyTaxi case which, although presently only an Employment Tribunal decision, offers a useful contrast and draws out the elements of the Uber case that were important.
In the Mytaxi case, the Tribunal decided that:
- Unlike Uber drivers, the drivers recruited by MyTaxi were Black Cab Drivers, who held licences to drive black cabs and were licenced by Transport for London to provide their services in designated areas. It was the driver, not MyTaxi, who was subject to Transport for London’s regulatory regime. In the case of Uber, it is Uber (not a driver) who is the holder of the licence and is subject to regulation by Transport for London.
- There was not a dependent work relationship as less than 15% of the driver’s overall income came from jobs gained via MyTaxi. The Uber drivers were wholly dependent on work from the Uber Smartphone App.
- There was very little control exerted by MyTaxi over the driver. The way in which the work was done was controlled by Transport for London and the driver, who could select his or her own route and exercise discretion over the fare. By contrast, Uber sets the default routes for its drivers, fixes fares and the other conditions such as the choice of vehicle used.
The Tribunal decided, taking these factors into account, that the MyTaxi driver was, indeed, an independent contractor.
The Uber case is important as it provides judicial guidance at the highest level on the elusive difference between a worker and a self employed independent contractor. But as the MyTaxi case shows, a Tribunal can come to a different conclusion on what appear to be marginally different sets of facts – because of this, the arguments about worker status in individual cases is definitely not
DMH Stallard’s Employment Group is able to assist you resolve the issues in this article. Please contact Stephen ten Hove
or on 020 7822 1518.