Uber Loses Supreme Court Case About Employment Status of Drivers

By Gary Smith


The Supreme Court has today (19 February) handed down its long-awaited judgment in the Uber v Aslam case, endorsing the decision of all earlier courts that Uber drivers are ‘workers’ and not genuine self-employed contractors.

This case has been running for some six years, initially at the Employment Tribunal, then at the Employment Appeal Tribunal (EAT), the Court of Appeal and now the Supreme Court. Uber has lost on each occasion. 

Although deciding a number of claims, the crux of this case related to whether the drivers could be considered ‘workers’ and therefore entitled to certain employment benefits such as the National Minimum Wage, paid holiday, the right not to be discriminated against etc.

Uber based a key part of its case on the written contract between it and the drivers which emphasised (again and again) that the drivers were self-employed. Uber argued that if it is the express intention of the parties that the driver be considered self-employed and the contract is not obviously misrepresentative of the true relationship, no court or tribunal should overturn the written contract.

 The Supreme Court however rejected this contention.  Rights such as the entitlement to be paid the National Minimum Wage and to receive paid holiday arise as statutory rights. As such, the Supreme Court held that the correct way to assess someone’s status is as against the relevant statutory test, rather than what the contract says.  That is not to say that the contract is not a relevant part of the consideration, but it cannot override the other elements set out in the statute.

The Supreme Court went on to observe that the purpose of the relevant legislation was to provide protection to vulnerable workers.  To allow the employer to override those rights by way of a carefully drafted contract would ‘reinstate the mischief which the legislation was enacted to prevent’.  The Supreme Court emphasised that any contractual provision which sought to limit statutory protections are ‘of no effect and must be disregarded’.  They held that certain sections of the contract were therefore void.

The Supreme Court emphasised five key points:

  • The remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it
  • The contractual terms on which drivers perform their services are dictated by Uber
  • Once a driver has logged onto the Uber app, a driver’s choice about whether to accept requests for rides is constrained by Uber (they would issue warnings to drivers who refused jobs and would ultimately terminate the agreement if they refused too many)
  • Uber exercises a significant degree of control over the way in which drivers deliver their services
  • Uber restricts communication between the passenger and the driver, thereby preventing the drivers from establishing a relationship with a passenger capable of extending beyond an individual ride

It was held that Uber held so much control over the working relationship that the drivers were workers and in his lead Judgment Lord Leggatt (with whom the entire panel agreed) stated: ‘Indeed, that was, in my opinion, the only conclusion which the tribunal could reasonably have reached’.

This is a very significant judgment for all businesses which engage the services of self-employed contractors.  Uber is now facing potentially huge liability to drivers who can claim minimum wage claims of up to six years back pay.  They can also claim 5.6 weeks of paid holiday each year. 

Importantly, however, they were not classed as employees and therefore do not gain protection from unfair dismissal or the right to redundancy payments.

What this case has emphasised is that although the contractual paperwork is important, the nature of how you structure your business and relationship with your staff is critical in assessing their employment status. 

This judgment highlights how important it is for employers to get this right and to ensure that the underlying structure is put in place carefully and with full respect for the law.

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