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Supreme Court Uber decision good for gig economy but offers little for contractors

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The Supreme Court has this morning confirmed the decision to award statutory rights to two former Uber drivers, in a significant decision for gig economy workers. In the case of Uber BV and others v Aslam and others, the tribunal rejected the US taxi-hailing company’s appeal against the classification of former drivers Yaseen Aslam and James Farrar as ‘workers’ during their respective engagements.

“Uber drivers and other gig economy workers should be celebrating today,” comments ContractorCalculator CEO Dave Chaplin. “The verdict means that as workers they will be entitled to a number of statutory benefits that come with worker status and Uber will have to face up to their employer responsibilities.

“Firms should not be misclassifying workers in contrived ways to avoid fulfilling their duties as employers by providing workers their due rights.The drivers were not carrying on their own business undertaking, were providing personal service, and were heavily controlled by the Uber app.”

“The take-away for the contracting community regarding IR35 and Off-Payroll matters is the reinforcement of what we know already – make sure the contractual paperwork is correct and a true reflection of the engagement. Then there should be no issues.”

Supreme Court upholds ‘worker’ rights claim

This morning’s Supreme Court ruling upheld the 2016 employment tribunal decision which determined that the drivers in question were entitled to certain rights and protections, including the minimum wage under the National Minimum Wage Act 1998 and paid leave under the Employment Rights Act 1996.

This decision was made on the findings that the drivers were ‘workers’ of Uber whenever they:

  1. had Uber’s app switched on;
  2. were within the territory in which they were authorised to work; and
  3. were able and willing to accept assignments

The decision was subsequently, and unsuccessfully, challenged by Uber via both the Employment Appeal Tribunal (EAT) and the Court of Appeal, with the US taxi-hailing company contesting that the written agreement between the drivers and Uber was inconsistent with a worker relationship.

Uber outcome hinged on application of Autoclenz ruling

As a result of Uber’s assertion concerning the written agreement, the case was considered largely in relation to the Supreme Court Autoclenz v Belcher ruling. In this landmark case, a group of car valeters were determined to be employees of Autoclenz after the contracts issued by the car detailing business were deemed inconsistent with the true arrangement between the parties.

However, though based on the same employment case law principles, Chaplin stresses that the circumstances mean contractors needn’t read too much into the Autoclenz decision when considering their own IR35 status:

“It’s important to remember that Uber is an employment case, between two parties who disagreed what the true agreement was. For IR35 cases, where both the client and the contractor agree the relationship is ‘outside IR35’, Autoclenz may not come into play, because there is no mischief, artifice or sham whereby one side has tried to exercise their bargaining power to impose a contractual arrangement which is not a true reflection of the reality.”

What does the decision mean for contractors?

Despite being an employment tribunal case, the outcome will have been of interest to some contractors as it required application of the same employment case law principles that underpin IR35. Case law is ever evolving, and with Supreme Court rulings often establishing new precedents, there was always the potential for the judgement to have repercussions for the contracting sector.

However, Chaplin notes that the working models adopted by the drivers in question means there is little to glean from the outcome for limited company contractors who may be considering legal action in response to an ‘inside IR35’ status assessment:

“The Uber case is fact-specific and about workers who were self-employed sole traders, not using limited companies. PSC contractors will not be able to overcome the interposition of a limited company and claim they are workers or employees.

“Instead, their best hope might be via the Agency Workers Regulations (AWR), claiming holiday pay, like the Susan Winchester case. But, to defend against this, the client is likely to ask the contractor to demonstrate they were paying taxes correctly as inside IR35 – which discourage some contractors from proceeding with litigation.”

Chaplin concludes: “There are other cases due to be released that will have a much more interesting bearing on IR35 status for contractors.”

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UK Supreme Court’s Uber decision is a victory for all gig workers | Business and Economy News

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For the past few years, the “gig economy” business model – in which workers are classified as independent contractors and therefore not given basic employment rights – has been on trial across the world.

From Uruguay and the United States to Australia and France, couriers and drivers have been bringing legal challenges against food delivery and passenger transport companies, such as Uber, Lyft, and Deliveroo, arguing that as their “workers” or “employees” they should be entitled to employment protections such as minimum wage, paid holidays and the right to unionise.

The United Kingdom has been one of the main battlegrounds for such cases and things have not gone well for the companies: they have lost virtually every high-profile workers’ rights case that has been brought against them.

And last week, they lost again. In a landmark decision published on February 19, the UK Supreme Court ruled that Uber drivers belong to the legal category of “limb (b) workers”, which entitles them to employment rights.

The court reasoned that “the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber… [It] is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill.”

For anyone who has taken an Uber before, this assessment is no shocker. The decision is also not surprising as Uber had already lost three times in a row before the case reached the Supreme Court. Nevertheless, this decision still has dramatic implications for workers.

“Gig economy” companies often make the people who work for them sign highly sophisticated contracts that are designed to make it look like they are independent entrepreneurs rather than the companies’ employees. When the issue goes to court, the companies rely on these contracts to argue their case. These contracts are key to the functioning of the “gig economy” because they are the main mechanism through which the companies try to disguise the otherwise blindingly obvious fact that they are hiring workers and telling them how to do their jobs but refusing to give them basic employment rights and protections.

The Supreme Court addressed this issue in its latest decision against Uber head-on. In particular, it held that courts and tribunals should not treat these contracts as the starting point of their analysis, because “an employer is often in a position to dictate such contract terms” and “the individual performing the work has little or no ability to influence those terms”.

The effect of the Uber decision is that it will now be even harder for employers to use their contracts to misclassify their workers and deprive them of basic rights. This means that any attempt by Uber to squirm out of the decision by changing the contracts – as the company has already hinted at – will be all but hopeless in the courts.

With last week’s decision against Uber, the Supreme Court also underlined its commitment to ensuring that the laws passed by Parliament – in this case laws that aim to protect vulnerable workers from exploitative employers – are being fully implemented.

The UK Supreme Court has been bolstering the role of Parliament for a while now.

In 2017, the court held that despite the Brexit referendum vote, then-Prime Minister Theresa May could not take the UK out of the European Union without an act of Parliament. Later that year, the court struck down a regime of employment tribunal fees, noting that if people do not have unimpeded access to the courts to demand the enforcement of the laws passed by Parliament, “the democratic election of Members of Parliament may become a meaningless charade”.

And in 2019, after Prime Minister Boris Johnson attempted to shut down Parliament for several weeks, the Supreme Court ruled the decision unlawful. Indeed, it is a hypocritical peculiarity of British politics in recent years that despite a Brexit campaign fought by some – ostensibly – to protect the sovereign role of Parliament, it is the Supreme Court, rather than the Brexiteer government in power, that has become the institution’s staunchest defender.

With its latest decision against Uber, the Supreme Court sent the message to all UK workers that it would not allow gig economy companies to trample employment rights and protections that have been enshrined in law by their elected representatives.

The impact of the decision is likely to be felt beyond Britain’s shores as well.

For example, some of the worker’s rights the Supreme Court considered in last week’s decision come from European Union (EU) law. In EU law, various employment rights, such as paid holidays, equal pay for men and women, and protection from discrimination, apply to “workers”, a legal category with the same definition in the bloc’s 27 member states. So, the fact that Uber drivers were held to be “workers” in the UK would likely be persuasive for courts across the EU considering whether the company’s drivers are entitled to the same rights there.

Beyond Europe, from India to the US, the decision has been hailed as a symbolic precedent for regulators and courts.

Although employment laws differ between countries, Uber’s defence in workers’ rights cases is usually the same: it claims to be a technology, rather than transportation, company, acting as an intermediary between drivers and passengers. The fact that a panel of six justices of the UK’s highest court has unanimously rejected this absurd assertion is likely to be persuasive for courts around the world grappling with the same issue.

In the US, there are multiple definitions of “employee” across state and federal laws. However, the courts often consider the control a company exerts over a worker as a key factor when deciding whether that worker is entitled to employment rights or not. So, the UK Supreme Court’s extensive discussion of how Uber controls its drivers will likely be helpful to drivers arguing their cases across the pond.

In Australia, Uber has successfully defended itself against several legal challenges concerning workers’ rights (although it recently settled the most high profile of these after being scolded by a judge in federal court). However, Sheryn Omeri, one of the lawyers representing Uber drivers in the UK, who also practices law in Australia, suggests the UK Supreme Court’s decision will be influential on future Australian cases. UK court decisions are “the obvious choice for Australia to look to”, she told me.

It is important to note that when it comes to regulating the “gig economy”, the judiciary, workers and trade unions cannot act alone. Governments must force companies to obey the law by way of prosecutions and fines. Indeed, the UK government has a particularly abysmal record on this, making the role of trade unions all the more important. But with last week’s decision, the exploitative “gig economy” business model has been dealt a decisive blow, and for that, couriers, drivers, and unions worldwide should celebrate.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.



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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

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Uber’s UK ruling could have implications for gig economy startups

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Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“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,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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