Uber has lost its appeal against an employment tribunal ruling in the U.K. that said it has to give its drivers workers’ benefits, such as a the minimum wage and statutory holiday pay.
The case, which dates back to mid-2016 and was initiated by the GMB trade union, has major implications for the “gig economy,” at least in the U.K.
Companies such as Uber, Deliveroo, and TaskRabbit view those selling their services over the platform as independent contractors who do not get to enjoy the benefits that proper employees have. This is indeed a lynchpin of the platforms’ business models, as it reduces their costs.
However, on Friday the Employment Appeal Tribunal (EAT) in London confirmed the Employment Tribunal’s September 2016 that this approach simply doesn’t fly. The appellate tribunal said Uber’s drivers are workers, so they get workers’ benefits.
Uber said it will appeal the ruling.
The EAT said in its decision that genuine independent contractor relationships include “no obligation for work to be offered and no obligation for any offer of work to be accepted.” With Uber, it said, that is not the case.
“Once Uber drivers are in the territory and have switched on the app, they will be offered a trip if they are the nearest driver and… were told they ‘should accept at least 80% of trip requests’ to retain their account status,” judge Jennifer Eady said. “Even if the evidence allowed that drivers were not obliged to accept all trips, the very high percentage of acceptances required justified the [lower tribunal’s] conclusion that, once in the territory with the app switched on, Uber drivers were available to [Uber] and at its disposal.”
“We are very pleased that the EAT has rejected Uber’s appeal. We have always believed that the Employment Tribunal’s decision from last year October was entirely correct in saying that our GMB member clients were entitled to workers’ right such as the minimum wage and holiday pay,” said Nigel Mackay, employment solicitor at Leigh Day, the firm that represented the union members.
Mackay added that Uber should now accept the decision, so that the lower tribunal can assign compensation.
However, Uber said it will appeal further—the next step will be the Court of Appeal, after which the final potential stage would be an appeal to the Supreme Court.
“The tribunal relies on the assertion that drivers are required to take 80% of trips sent to them when logged into the app. As drivers who use Uber know, this has never been the case in the U.K.,” Tom Elvidge, Uber UK’s acting general manager, said in a statement. “Over the last year we have made a number of changes to our app to give drivers even more control. We’ve also invested in things like access to illness and injury cover.”
The ruling comes in the context of wider problems for the company in the U.K. In September, London’s transport authority declined to renew Uber’s private-hire operator license over concerns about its vetting of drivers, its under-reporting of crimes by drivers, and the tactics it has used to undermine regulators in the past.