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Cab-hailing app Uber is facing a legal challenge from drivers who say the firm is acting unlawfully by not offering holiday and sick pay. An employment tribunal has started hearing evidence in what has been called the ‘UK employment law case of the year’ – a grand title but just about befitting of this test case.

Employment status has long been the greyest area of employment law.  Is someone self employed or are they really an employee, or a worker?

This tribunal decision will have far reaching implications, and a ruling for the drivers will open the flood gates for other similar claims against companies operating this type of arrangement.  A decision in favour of Uber will cement their arrangement with drivers and no doubt given a boost to other companies seeking to operate a similar business model.

This is why the Uber case has employment lawyers glued.  The drivers are claiming that they are workers because the terms and conditions of the arrangement means that Uber has such a degree of control over them that they cannot be said to be self employed, and therefore they are entitled to national minimum wage, holiday pay etc. It should be noted they are not arguing that they are employees, who would have increased rights above those of a worker.  Uber will seek to argue that they simply put the drivers in touch with customers but the drivers are their own boss. They will say that they are simply a technology company who don’t provide services themselves – so the nature of that will be analysed too.

Even where both parties believe and want to have a self employed relationship, an Employment Tribunal and HMRC can see it differently.  Such is the difficulty with employment status claims. They require scrutiny of all the facts and circumstances and questions need to be asked, including: Do they have to do the work themselves? Can someone tell them at any time what to do, where to carry out the work or when and how to do it?  Can they work a set amount of hours?

Answering yes to any of these might be more indicative of an employee or worker status, whereas someone is more likely to be classed as self employed if they provide the main items of equipment they need to do their job, agree to do a job for a fixed price regardless of how long the job may take or if they regularly work for a number of different people.

Companies often fall into the trap of considering someone to be self employed just because the ‘contractor’ is responsible for their own tax and NI – this on its own is not enough to prove there is no employment relationship.  It’s essential to ensure that you have the correct documentation reflecting the genuine position between you and the contractor, and that the circumstances and facts of their work for you in practice do not form an employment relationship.

Naturally Uber are represented by a QC who on day 1 of the hearing has started to cross examine the drivers bringing this case and suggest that Mr Farrar (one of the drivers) was free to choose the jobs he did and frequently cancelled jobs that Uber sent to him.  Mr Farrar, who is being backed by the GMB union, appears to have vehemently denied this and is adamant that he did the number of jobs his ‘employer’ recommended but that his net earnings fell well below the National Minimum Wage.  The case will continue for at least the rest of this week though we are unlikely to know the outcome for some weeks after that.

We wait with baited breath!

By ELAS consultant Emma O’Leary, who specialises in employment law.

Emma is available for interview, analysis or ongoing comment on this story. Please contact Miriam Payne, PR and Communications Officer, on 0161 785 2000 ext. 451 or email miriam.payne@elas.uk.com to arrange.

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