News & Events

Employment Appeal Tribunal decides Uber drivers have worker status

Submitted By Firm: Addleshaw Goddard

Contact(s): Michael Leftley, Sarah Harrop

Author(s):

Helen Almond

Date Published: 11/13/2017

Article Type:

Share This:

The Employment Appeal Tribunal (EAT) has, this morning, upheld a previous Employment Tribunal decision that, when the Uber app is switched on, Uber drivers are workers for the purposes of their claims under the Employment Rights Act 1996, Working Time Regulations 1998 and National Minimum Wage Act 1998 (Uber BV, Uber London Limited and Uber Britannia v Aslam & Ors, UKEAT/0056/17/DA)

Background

In 2016, an Employment Tribunal ruled that taxi drivers engaged by Uber were workers, rather than self-employed contractors.  This ruling entitles Uber drivers to certain employment rights such as to be paid in accordance with the National Minimum / Living Wage and protections under the Working Time Regulations (e.g. rest breaks and paid holiday). 

However, Uber appealed the Tribunal's decision to the EAT.  The EAT hearing took place on 27 and 28 September 2017 and judgment was handed down on Friday 10 November 2017.

Employment Tribunal decision

Uber's business operates via a smartphone app offering taxi services.  When the case was originally heard before the Employment Tribunal in 2016, Uber argued that it was merely a linking platform matching would-be passengers with self-employed drivers, rather than a taxi company employing taxi drivers.  However, in a fairly scathing judgment, the Tribunal described the suggestion that Uber was a mosaic of 30,000 small businesses linked by a common platform as "faintly ridiculous".

Instead, the Tribunal found that Uber exercised a high degree of control over their drivers in a number of different ways, which were all inconsistent with the notion that they were self-employed.  The Tribunal also noted that in the documentation surrounding the engagement of the drivers, Uber had resorted to "fictions" (e.g. fake invoices that it generates on behalf of the drivers but which are never sent to customers) and used "twisted language" in the contracts with the drivers which misrepresented the true relationship.  Ultimately, the Tribunal decided that when a driver:

  • switched on the app;
  • was in the territory in which they were authorised to work; and
  • was able and willing to accept assignments,

then he was working for Uber London Limited (ULL) under a worker contract.  The Uber drivers did not argue that they were also employees, so that issue was not determined by the Tribunal.  The Tribunal did acknowledge that their decision did not mean that Uber could not devise a business model comprising independent contractors; it is just that their current business model does not achieve that aim.  With approximately 40,000 drivers in the UK, it was no surprise when Uber appealed the decision to the EAT.

Points of appeal

At the EAT, Uber contended that:

(1)  The Tribunal had been wrong to disregard the written contractual documentation.  

In particular, Uber noted that there was no contract between the drivers and ULL (the company registered in the UK and the holder of the private hire vehicle licence in London which makes provision for the invitation and acceptance of private hire vehicle bookings), but only written agreements between the drivers and Uber BV (the Danish parent company which holds the legal rights to the Uber app) and riders, which Uber argued was therefore inconsistent with the existence of any worker relationship.

Uber argued that these agreements made it clear that Uber drivers provided transportation services to riders, and that ULL (as was common within the mini-cab or private hire industry) provided its services to the drivers as their agent.  Uber argued that, by finding otherwise, the Tribunal had disregarded the basic principles of agency law.

(2)  The Tribunal had been wrong to rely on regulatory requirements as evidence of worker status and had made a number of internally inconsistent and perverse findings of fact in concluding that the drivers were required to work for Uber.

(3)  The Tribunal had failed to take into account relevant matters relied on by Uber as inconsistent with worker status, which strongly indicated that the drivers were carrying on a business undertaking on their own account.

EAT decision

In a judgment handed down on Friday 10 November, the EAT rejected Uber's appeal on the following grounds:

(1)  The Tribunal had been wrong to disregard the written contractual documentation.

In relation to Uber's first point of appeal, the EAT held that the Tribunal had been entitled to reject the characterisation of the relationship between Uber drivers and Uber (specifically ULL), in the written contractual documentation.  Applying Autoclenz Ltd v Belcher and Ors (2011), the EAT found that the reality of the situation was that the drivers were incorporated into the Uber business of providing transportation services, subject to arrangements and controls that pointed away from their working in business on their own account in a direct contractual relationship with passengers each time they accepted a trip.

Having determined the true nature of the parties’ bargain, the EAT held that the Tribunal was entitled to reject the label of agency used in the written contractual documentation. The EAT was satisfied that the Tribunal had not disregarded the principles of agency law, but had been entitled to consider the true agreement between the parties was not one in which ULL acted as the drivers’ agent.

 (2)  The Tribunal had been wrong to rely on regulatory requirements as evidence of worker status and made a number of internally inconsistent and perverse findings of fact in concluding that the drivers were required to work for Uber.

In carrying out their assessment, the EAT held that the Tribunal was not obliged to disregard factors simply because they might be seen as arising from the relevant regulatory regime, as that was part of the overall factual matrix that the Tribunal had to consider.  In any event, in this case, the EAT was satisfied that the Tribunal's findings on control were not limited to matters arising merely as a result of regulation.

In considering the Tribunal's findings, the EAT held that it was necessary to have regard to the Tribunal's judgment as a whole.  By taking this approach, it was apparent that the Tribunal's findings were neither inconsistent nor perverse.  The Tribunal had been entitled to conclude that there were obligations upon Uber drivers that they should accept trips offered by ULL and that they should not cancel trips once accepted (given that there were potential penalties for doing so).

(3)  The Tribunal had failed to take into account relevant matters relied on by Uber as inconsistent with worker status, which strongly indicated that the drivers were carrying on a business undertaking on their own account.

The EAT also had no objection to the Tribunal's approach of requiring the drivers not only to be in the relevant territory, with the app switched on, but also “able and willing to accept assignments”, as that was consistent with Uber’s own description of a driver’s obligation when “on-duty”.

These findings had informed the Tribunal's conclusions not just on worker status but also on working time and as to the approach to be taken to their rights to minimum wage. As a result, the EAT concluded that the assessment that the Tribunal had carried out was fact and context specific. To the extent that drivers, in between accepting trips for ULL, might hold themselves out as available to other private hire vehicle operators, the same analysis might not apply; which is why the Tribunal observed that it would be a matter of evidence in each case.

So, although there may be a few gaps when the drivers did not have the Uber app switched on and were not workers for ULL,that was not fatal to the drivers' status as 'workers' when they did have the Uber app switched on.

Comment

In several other 'gig economy' cases before the courts this year, other workers such as cycle couriers and plumbers who were said to be self-employed have also been successful in arguing that they are workers for the purposes of the Employment Rights Act 1996, endowing them with a host of employment rights.  In light of this general direction of travel, the EAT's latest decision in this case is perhaps fairly unsurprising.  However, we understand that Uber are likely to appeal this decision and may even seek a leapfrog appeal to the Supreme Court so that this case can be heard at the same time as the case of Pimlico Plumbers v Smith, which is due to be heard by the Supreme Court on 20-21 February 2018.

In the meantime, a copy of the EAT's judgment in this case can be found here.

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel