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.