Why Uber may have crashed the party for the gig economy?

Posted on Nov 17, 2017

Uber has certainly taken a bit of a bashing recently, but last Friday’s EAT decision in my opinion did not come as that much of surprise.  When the court decided that the employment tribunal’s decision was right and that Uber drivers are classified as “workers” rather than being self-employed, there was a certain amount of shrugging of shoulders and a “well of course” response in our office.

For the drivers and their representatives this represents a huge victory and clarification that those working in the “gig economy” will now enjoy being covered by the National Minimum Wage Act and the Working Time Regulations.  However, as they are not classified as “employees” they do not receive benefits such as the ability to claim unfair dismissal and the right to a statutory redundancy payment.

But let’s be clear, this decision is not new law.  What it does represent is a warning to similar “gig economy” employers that those working for them in what they regard to be flexible arrangements could now also be classified as “workers” and therefore have the right to receive the appropriate benefits.  Furthermore, those working under a gig economy company who feel like they have been treated unlawfully could now have more grounds to make a claim against their “employer”.  The other significant aspect of this case is the tax and other financial implications for those businesses.

For companies who fall into this category of seeing themselves as agents rather than employers, it might be wise to audit the workforce and review current policy on how the current contractors are treated.

Remember:  whether somebody is an employee, worker or genuinely self-employed is about as murky as it can get. If, as the “employer” you take such steps as disciplining your contractors, demanding when they work for you, providing them with equipment, then these are all potential markers of employment and not self-employment and you could be storing up problems for a later date.