Following a five-year legal battle, the Supreme Court has held that Uber drivers are in fact ‘workers’. This is the first case concerning the status of individuals employed within the ‘gig economy’, and will have an enormous impact on an estimated 45,000 Uber drivers in London and on the rights of gig economy workers (an estimated 5.5m people in the UK).

An individual doing paid work in the UK is either a worker, an employee, or self-employed. The differences in status determine pay and benefits, the type of contract they receive for completing the work, as well as the employment rights they are entitled to.

The classification of drivers as ‘workers’ is still a form of self-employment but will guarantee Uber drivers’ basic protections, including the national minimum wage, holiday pay, and protection against discrimination and will require Uber to adhere to more extensive health and safety obligations.

In 2016, following a hearing before the Central London Employment Tribunal, Judge Snelson ruled that Uber had used ‘fictions’ and ‘twisted language’ to mischaracterise the employment status of its fleet of drivers.

Uber had argued that its only role was to provide technology services and act as an agent for the drivers. The Supreme Court found that there was “no factual basis for Uber’s contention that Uber London acts as an agent for drivers when accepting private hire bookings”.

It has taken nearly five years to secure this final decision but the Supreme Court has concluded unanimously that the original judgment of the Employment Tribunal was “the only conclusion which the Tribunal could reasonably have reached”.

The Supreme Court endorsed the view that the courts should adopt a test that focuses on the reality of the day-to-day relationship and, in doing so, emphasised that courts must take into account the imbalance of bargaining power between the parties. The Supreme Court went further and emphasised that laws such as the National Minimum Wage Act were enacted to protect individuals that Parliament considered to be vulnerable to exploitation. They also highlighted that any attempt by organisations to draft artificial contracts aimed at side-stepping basic protections are void and unenforceable. This will be highly relevant to many gig employers who may need to revisit their contracts and business models in light of this judgment.

The claimants were represented by lawyers from Bates Wells. Paul Jennings, Partner at Bates Wells said:

“James and Yaseen have shown extraordinary courage and resilience. They have been pitted against a multi-billion-dollar company in litigation that has lasted half a decade and they have succeeded. Their success will have an enormously beneficial impact, which will be felt across the entire gig economy.

“The Supreme Court’s Judgment is a clear and powerful restatement of the importance of basic employment protections. It will shape all future cases concerning the gig economy. The ruling strikes at the heart of Uber’s business model. We anticipate there will be a significant class action against Uber. As a business, it will need to reflect very carefully on the implications of the Judgement.”

Rachel Mathieson, Senior Associate at Bates Wells said:

“We are simply delighted with the outcome of this long and hard-fought battle. The judgment has made it clear that it is not open to gig employers to pick and choose its rules – if the law mandates that these individuals should be paid National Minimum Wage then there is no contract that can escape that.

“Today’s judgment is a crucial milestone in the protection of individuals in our modern economy. The Supreme Court has confirmed that laws including the National Minimum Wage Act are there to protect vulnerable workers from being paid too little for the work they do, being required to work excessive hours or being subjected to other forms of unfair treatment.”

James Farrar, lead test claimant, said:

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery. Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom. The reality has been illegally low pay, dangerously long hours and intense digital surveillance. I am delighted that workers at last have some remedy as a result of this ruling, but the government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal.”

Yaseen Aslam, lead test claimant, said:

“I am overjoyed and greatly relieved by this decision which will bring relief to so many workers in the gig economy who so desperately need it. During the six years of these proceedings, we have watched the government commission and then shelve a review of the gig economy yet do nothing to help us. I hope in future the government will choose to carry out its duty to enforce the law and protect the most vulnerable from exploitation.”