Tribunal rules that Uber drivers are entitled to minimum wage & holiday pay

3rd November 2016

Last week, in a ruling by a London employment tribunal, two Uber drivers won the right to be classed as “workers” rather than self employed contractors, meaning they will now be entitled to holiday pay, paid breaks and the national minimum wage.

This Uber case is the first in Britain to test the idea of the ‘gig economy,’ which is an environment where organizations contract with independent workers for short-term engagements. Yet whilst many describe this verdict for the 40,000 drivers in England and Wales as a “monumental victory,” Uber has said it would appeal against the ruling that it had acted unlawfully.

The case against Uber was taken up by The GMB Union, who stated that these drivers and thousands of other flexible workers who’ve been caught in the ‘bogus self-employed trap’ will now be able to enjoy the same benefits and rights as employees.  The GMB Union also said that not only will these drivers be properly licensed and be able to drive a well-maintained, insured vehicle, but these changes will be beneficial for their passengers too.

However, Uber’s UK manager, Jo Bertram has said: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.

“The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people, we will be appealing it.

It would be a shame if this ruling jeopardised the gig economy, which helps drive innovation, competition and many benefits for workers and employers.  Though with the growing popularity of working in this way, it’s only right that companies ensure they are providing fair conditions for workers.  Already this debate has split views across the world; with supporters believing this way of work provides flexibility and opportunity to workers, and critics saying we’re creating an ‘underclass of insecure workers.’

Commenting on the recent ruling, General Secretary Frances O’Grady said: “For many workers the gig economy is a rigged economy, where bosses can get out of paying the minimum wage and providing basics like paid holidays and rest breaks.

“What is happening at Uber is just the tip of the iceberg. Lots of people are now trapped in insecure jobs, with low pay and no voice at work. We need the government to get tough on sham self-employment.”

Judge Anthony Snelson, who led the tribunal panel, accused the firm of “resorting in its documentation to fictions, twisted language and even brand new terminology” and even quoting Shakespeare’s, Hamlet to suggest that the group’s UK boss was ‘protesting too much’ about its position.

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” the judges said. “Drivers do not and cannot negotiate with passengers … They are offered and accept trips strictly on Uber’s terms.”

Walker Smith believes the Uber ruling is great news, because we think that all workers should have workers rights and access to benefits where they can.  Uber and other similar business models work really well in giving workers flexibility, but that should not come at the expense of basic rights.  We work closely with recruiters and employers to ensure they maintain fair working practices and we provide services that allow workers to continue to work on a flexible basis while also receiving access to the same rights and benefits usually reserved for traditional employees.  As experts in working with contractors of any type, we are well placed to help business’ manage their flexible workforce, be that those who truly are self employee or in this case manage the transition to employees.

We will continue to watch this case unfold as Uber appeals.

What we know about Uber in numbers
£5: The hourly wage received in some months by one of the drivers who took the case.
40,000: The number of Uber drivers in the UK
7: The years that Uber has been in operation.
460,000: The number of people who could be falsely classified as self-employed in the UK
£314m: The yearly estimated cost in lost tax and employer national insurance contributions from falsely classified employees, according to Citizens Advice