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Drivers win ruling against Uber in case with implications for 'gig' economy

Published 28/10/2016

Uber drivers argue they should be entitled to holiday pay and receive at least the national minimum wage, in a test case
Uber drivers argue they should be entitled to holiday pay and receive at least the national minimum wage, in a test case

Online taxi firm Uber has lost a legal case on the employment rights of drivers in a ruling which could affect thousands of other workers and trigger massive changes in the "gig" economy.

Two drivers, supported by the GMB union, won a tribunal case against the private hire firm, successfully arguing they were employees rather than self-employed independent operators and should thus be entitled to holiday pay and a guaranteed minimum wage.

Uber claimed it is a technology company rather than a taxi firm, and says employment arrangements allow its 30,000 drivers across England and Wales to be their own boss and work flexibly.

But the tribunal panel offered a scathing dismissal of Uber's arguments, suggesting the firm had tried to bamboozle its drivers and passengers with "fictions", "twisted language" and "brand new terminology".

Judge Anthony Snelson even quoted from Shakespeare's great tragedy Hamlet in his withering assessment of the company's defence, saying: "Reflecting on the respondents' general case, and on the grimly loyal evidence of (Uber regional general manager) Jo Bertram in particular, we cannot help being reminded of Queen Gertrude's most celebrated line, 'The lady doth protest too much, methinks'."

He added: "It is not real to regard Uber as working 'for' the drivers, and the only sensible interpretation is that the relationship is the other way around."

The ruling - which Uber said it is appealing against - is likely to have major implications for thousands of employees in the gig economy, in which users acquire on-demand services through apps and websites.

Nigel Mackay from Leigh Day, which represented two drivers, James Farrar and Yaseen Aslam, in the test case, described the judgment as a "game-changer".

He said: "Other companies that are structuring their business in this way will now need to look at those arrangements because they are at risk of a similar finding.

"If you run a technology business you can't just use that to hide from employment law. Just because you are a modern technology business doesn't mean you are above the law."

The case is the first time Uber has faced legal action in the UK over whether its drivers are workers or self-employed.

Uber claimed its drivers have a choice about their work and argued there is nothing to force them to drive exclusively for Uber, giving them freedom to work with other private hire operators.

But lawyers for the drivers claimed Uber acts unlawfully by deducting sums from their pay, often without telling them in advance, including when customers make complaints.

Mr Farrar, from Bordon in Hampshire, told the tribunal there was "tremendous pressure" to meet Uber's demands and drivers were forced to choose between safety and doing the job.

He also claimed he had been paid around £5 an hour for some work, far below the minimum wage and what Uber said it paid him, and dismissed suggestions that Uber is a customer of drivers who run their own businesses, saying it "in no way reflects the reality".

The TUC said the Uber case had exposed the "dark side" of the UK's flexible labour market and was the "tip of the iceberg".

General secretary Frances O'Grady said: "The GMB deserve huge credit for a shining light on conditions at Uber and winning this landmark action.

"For many workers the gig economy is a rigged economy, where bosses can get out of paying the minimum wage and providing basics like paid holidays and rest breaks."

The GMB's legal director Maria Ludkin described the ruling as a "monumental victory" and suggested Uber drivers should join the union to force the company to recognise their rights.

She said: "This loophole that has allowed unscrupulous employers to avoid employment rights, sick pay and minimum wage for their staff and costing the government millions in lost tax revenue will now be closed.

"Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees.

Ms Bertram said Uber would appeal against the ruling, saying: "Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.

"The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want.

"While the decision of this preliminary hearing only affects two people we will be appealing it."

Press Association

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