Uber drivers are workers not self-employed, Supreme Court
rules
By Mary-Ann
Russon
Business
reporter, BBC News
Published1 day
ago
Uber drivers must be treated as workers rather than
self-employed, the UK's Supreme Court has ruled.
The decision could mean thousands of Uber drivers are
entitled to minimum wage and holiday pay.
The ruling could leave the ride-hailing app facing a
hefty compensation bill, and have wider consequences for the gig economy.
Uber said the ruling centred on a small number of drivers
and it had since made changes to its business.
In a long-running
legal battle, Uber had finally appealed to the Supreme Court after losing three
earlier rounds.
Uber's share
price dipped as US trading began on Friday as investors grappled with what
impact the London ruling could have on the firm's business model.
It is being
challenged by its drivers in multiple countries over whether they should be
classed as workers or self-employed.
What's the
background to the ruling?
Former Uber
drivers James Farrar and Yaseen Aslam took Uber to an employment tribunal in
2016, arguing they worked for Uber. Uber said its drivers were self employed
and it therefore was not responsible for paying any minimum wage nor holiday
pay.
The two, who
originally won an employment tribunal against the ride hailing app giant in
October 2016, told the BBC they were "thrilled and relieved" by the
ruling.
"I think
it's a massive achievement in a way that we were able to stand up against a
giant," said Mr Aslam, president of the App Drivers & Couriers Union
(ADCU).
"We didn't
give up and we were consistent - no matter what we went through emotionally or
physically or financially, we stood our ground."
Lord Leggatt said
that the Supreme Court unanimously dismissed Uber's appeal
Uber appealed
against the employment tribunal decision but the Employment Appeal Tribunal
upheld the ruling in November 2017.
The company then
took the case to the Court of Appeal, which upheld the ruling in December 2018.
The ruling on
Friday was Uber's last appeal, as the Supreme Court is Britain's highest court,
and it has the final say on legal matters.
Delivering his
judgement, Lord Leggatt said that the Supreme Court unanimously dismissed
Uber's appeal that it was an intermediary party and stated that drivers should
be considered to be working not only when driving a passenger, but whenever
logged in to the app.
The court
considered several elements in its judgement:
Uber set the fare
which meant that they dictated how much drivers could earn
Uber set the
contract terms and drivers had no say in them
Request for rides
is constrained by Uber who can penalise drivers if they reject too many rides
Uber monitors a
driver's service through the star rating and has the capacity to terminate the
relationship if after repeated warnings this does not improve
Looking at these
and other factors, the court determined that drivers were in a position of
subordination to Uber where the only way they could increase their earnings
would be to work longer hours.
Jamie Heywood,
Uber's Regional General Manager for Northern and Eastern Europe, said: "We
respect the Court's decision which focussed on a small number of drivers who
used the Uber app in 2016.
"Since then
we have made some significant changes to our business, guided by drivers every
step of the way. These include giving even more control over how they earn and
providing new protections like free insurance in case of sickness or injury.
"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."
What did Uber
argue?
Uber has long
argued that it is a booking agent, which hires self-employed contractors that
provide transport.
By not being
classified as a transport provider, Uber is not currently paying 20% VAT on
fares.
The Supreme Court
ruled that Uber has to consider its drivers "workers" from the time
they log on to the app, until they log off.
This is a key
point because Uber drivers typically spend time waiting for people to book
rides on the app.
Previously, the
firm had said that if drivers were found to be workers, then it would only
count the time during journeys when a passenger is in the car.
"This is a
win-win-win for drivers, passengers and cities. It means Uber now has the
correct economic incentives not to oversupply the market with too many vehicles
and too many drivers," said James Farrar, ADCU's general secretary.
"The upshot
of that oversupply has been poverty, pollution and congestion."
Why are some
drivers unhappy with Uber?
Mr Aslam, who
claims Uber's practices forced him to leave the trade as he couldn't make ends
meet, is considering becoming a driver for the app again. But he is upset that
the ruling took so long.
"It took us
six years to establish what we should have got in 2015. Someone somewhere, in
the government or the regulator, massively let down these workers, many of whom
are in a precarious position," he said.
Mr Farrar points
out that with fares down 80% due to the pandemic, many drivers have been
struggling financially and feel trapped in Uber's system.
"We're
seeing many of our members earning £30 gross a day right now," he said,
explaining that the self-employment grants issued by the government only cover
80% of a driver's profits, which isn't even enough to pay for their costs.
"If we had
these rights today, those drivers could at least earn a minimum wage to live
on."
Will we pay more
for Uber rides?
That remains to
be seen, but it could potentially happen.
When Uber listed
its shares in the United States in 2019, its filing with the US Securities and
Exchange Commission (SEC) included a section on risks to its business.
The company said
in this section that if it had to classify drivers as workers, it would
"incur significant additional expenses" in compensating the drivers
for things such as the minimum wage and overtime.
"Further,
any such reclassification would require us to fundamentally change our business
model, and consequently have an adverse effect on our business and financial
condition," it added.
What is the VAT
issue about?
Uber also wrote
in the filing that if Mr Farrar and Mr Aslam were to win their case, HM Revenue
& Customs (HMRC) would then classify the firm as a transport provider, and
Uber would need to pay VAT on fares.
This relates to a
judicial review filed by Jolyon Maugham QC in 2019.
Mr Maugham, a
barrister specialising in tax and employment law, applied to HMRC to ask for a
judicial review and that HMRC demand that Uber pay VAT.
"I tried to
force the issue by suing Uber for a VAT receipt, because I thought that, that
way, even if HMRC didn't want to charge Uber, I would be able to force it
to," he told the BBC.
"The Supreme
Court has fundamentally answered two questions at the same time: one is whether
drivers are workers for Uber, and the other is whether Uber is liable to pay
VAT to HMRC," he said.
"It makes it
extremely difficult for Uber to continue to resist paying what I understand to
be more than £1bn in VAT and interest."
HMRC and Uber are
still in dispute about the firm's VAT liability.
What does this
mean for the gig economy?
Tom Vickers is a
senior lecturer in sociology at Nottingham Trent University and head of the
Work Futures Research Group, which studies the jobs that people do and how they
change over time.
He thinks the
Supreme Court's ruling has wider implications for a lot of other gig economy
workers like other private hire drivers, couriers and delivery drivers.
"The central
point for me is that the ruling focuses on the control that companies exercise
over people's labour - this control also carries with it responsibilities for
their conditions and wellbeing.
"This is
even more important in the context of the pandemic."
As for Uber,
Rachel Mathieson, senior associate at Bates Wells, which represented Mr Farrar
and Mr Aslam, said her firm's position was that the ruling applies to all
90,000 drivers who have been active with Uber since and including 2016.
"Our
position is that the ruling applies to all of their drivers at large," she
said.
Dr Alex Wood, an
Internet Institute research associate on gig economy at Oxford University,
disagrees.
He told the BBC
that because the UK doesn't have a labour inspectorate, these "rules
aren't enforced and it falls to workers to bring subsequent tribunals".
This means that
"in reality, it's very easy for Uber to just ignore this until more
tribunals come for the remaining 40,000 [drivers]"
Industrial
relations
Deliveroo loses appeal against FNV and must offer meal
delivery companies a contract
Judges also agree with trade union FNV on appeal.
Deliveroo meal deliverers are not self-employed but employees who are entitled
to an employment contract.
Barbara
Vollebregt16 February 2021, 17:08
Like it's
matchday in the boxing ring. One blow
after another will have to endure platforms that work through so-called
self-employed constructions. On Monday Trouw received access to a report by the
labour inspectorate about the Flexwerk app Temper. Conclusion? The company
behaves like an employment agency and so the self-employed who use the app
should be hired as employees.
While Temper was
still talking about a proverbial slap on the wrist, there is now a crystal
clear ruling by the Amsterdam Court of Appeal. The FNV trade union agrees on
appeal, deliveroo's meal delivery companies are not self-employed and are
entitled to an employment contract.
Platforms that work with the same self-employed structures, such as the
cleaners app Helpling and taxi app Uber, see it with empty eyes
The union is
happy. "Deliveroo meal deliverers can now claim an employment contract.
This entitles them to the collectively agreed wage, continued payment in case
of illness and also the time they have to wait at a restaurant is paid,"
says FNV director Zakaria Boufangacha.
Looking at rights
and obligations
The Court reached
its verdict by looking at the rights and obligations of meal delivery
companies. It is not what is written, but what a worker does in practice, that
determines the form of work. The way Deliveroo
operates "points more to the presence of an employment contract
than to its absence," the judges argue.
Deliveroo, for
example, deals with the level of pay. Something that a self-employed person
would pay off with a client himself. In addition, the wage offered is too low
to be able to pay basic services in the event of illness, incapacity for work
or unemployment.
In addition,
Deliveroo uses an algorithm called
Frank. Frank decides who gets offered which jobs. And that makes Deliveroo
heavily involved in the horse-trading between restaurants, delivery
drivers and the hungry customer.
Then there is the
time that delivery drivers are allowed to make about an order. Deliveroo imposes restrictions on this – on average,
delivery drivers have thirty minutes to deliver an order – so meal delivery
companies can't always decide for themselves which route they take. During
their route they can also be checked by means of a navigation tracking
system. All in all, this means that the
balance of power means that meal delivery companies are entitled to an
employment contract.
Freedom and
flexibility
Deliveroo said in
a statement that it disagreed with the judge's findings and the company is
appealing the ruling. According to
Deliveroo, their – often young –
delivery drivers are not waiting for an employment contract at all. "As
freelancers, delivery drivers have no obligation to work and complete freedom
about when, how long and how they work. This freedom and flexibility are denied
if they are obliged to work on the basis of an employment contract. We will
continue to stand up for their right to work for Deliveroo as a self-employed
person."
Employment lawyer
Pascal Besselink of legal service
provider DAS calls it a defining case. "The platform economy is a fairly
uncharted territory for employment law, this ruling gives a clear direction to
future cases."
In particular,
trade union FNV hopes that the ruling will permeate the politicians of The
Hague. "The judge shows that it's actually not that complicated at
all," driver Boufangacha said. "Every child can see that a cyclist
with a cube on his back is not a real entrepreneur. More political will is
needed to counter this kind of sham commissioning."
FNV takes Uber to court
Trade union FNV is suing Uber. The union wants to force
the tech company to hire its freelance drivers and pay according to the taxi
collective bargaining agreement.
Marieke de Ruiter15 December 2020, 12:00
According to
Uber, all drivers who drive through the app are self-employed entrepreneurs.
But unions say there is a disguised employment.
In the presence
of some Uber drivers, FNV handed over the subpoena to the US tech companyon
Tuesday afternoon. The union threatened a case two weeks ago if their demand,
an employment contract for all 4,000 drivers, was not met. Uber then announced
that it wanted to enter into talks, but that is not enough, according to FNV.
Disguised
employment
The position of
Uber drivers has been the subject of debate for years. According to the tech
company, all drivers who drive through
the app are self-employed entrepreneurs. But unions, and several foreign judges
and governments, argue that there is a disguised employment. After all, the
Uber drivers do not recruit their own customers and cannot determine their own
prices and working conditions. That's what Uber's algorithm does.
This is not the
first time that FNV has challenged a major player from the platform economy in
court. Hospitality platform Temper received another subpoena from the union
this autumn and last year the union brought a similar case against meal
platform Deliveroo. Its ruling was due to follow last month, but has been
postponed because the supreme court published an influential ruling on the
subject just before.
Self employed
In it, the
supreme court stated that the contract of assignment should not be leading in
self-employed constructions, but that it should be looked at how it works out
in practice. So the fact that Uber has agreed with drivers that they are
self-employed does not mean that they actually are. It's about how they do
their job. That ruling could give FNV 'a boost', employment law professor Evert
Verhulp previously told de Volkskrant.
Yet it is by no
means a runaway race. Uber is keen to continue working with self-employed
people. In America, it already led to a long legal battle with the state of
California that was ultimately decided in favor of the tech company. Again, the taxi app probably won't just give
itself up. "Drivers want to maintain the flexibility and independence they
greatly value," Uber said. 'We hope that FNV will join us to ensure
independence and push for extra protection in The Hague, including disability
insurance and access to pensions.'
.jpeg)
.jpeg)
.jpeg)
Sem comentários:
Enviar um comentário