In February, Uber drivers celebrated as the UK’s highest court handed down a judgment that had been years in the making: Uber drivers are workers under employment legislation, and not independent contractors.
The landmark Supreme Court ruling means that Uber drivers are entitled to at least the national minimum wage and paid annual leave, in addition to certain other protections.
It’s a judgment that is also likely to have wider ramifications for what has become known in modern parlance as the ‘gig economy’.
So, what are the implications for the future?
Implications for workers
Around five million people now work in the gig economy, in roles that have typically been characterised by low pay, zero-hours contracts and little in the way of workers’ rights.
While the ruling applies only to Uber drivers and does not automatically afford all gig economy workers the same status, it certainly sets a precedent for more to demand it.
Indeed, the judgment is being viewed by many as an important stepping stone towards better protections for all gig economy workers. Head of Public Affairs at Aegon, Kate Smith, commented that the ruling “could have ripple effects for all gig workers, giving them not only rights to holiday pay, but potentially other workplace benefits such as employer pension contributions.”
Implications for gig economy employers
Businesses employing gig workers could potentially see significant damage to their bottom line if the Supreme Court ruling expanded to encompass all people working in the gig economy. Paid leave, holiday and sick pay for every worker may even be unmanageable for some businesses.
This is likely the reason why Uber has downplayed the significance of the Supreme Court ruling in official statements, pointing out that the judgment applied only to a small number of drivers using the app in 2016.
The firm went on to say that it has since made changes to offer drivers better protections, including more control over their working hours. It has also commented that the status of ‘worker’ is unique to UK employment law, and that the ruling did not raise drivers to employee status.
Making a change
Even so, the company decided not to contest the judgment, and announced details of its new minimum wage policy in March. Uber says it has now committed to paying its drivers the minimum wage, holiday pay and pensions. Drivers will now receive:
- The National Living Wage once they have accepted a ride request
- An automatic holiday pay top-up of 12.07% of their earnings every two weeks (i.e. 28 days’ paid holiday per year)
- Automatic enrolment into a pension scheme, with workers paying 5% and Uber contributing 3%
However, Yaseen Aslam (one of the original 2016 complainants) has summed the new policy up as a ‘cheap PR trick’, pointing out that the company has only committed to paying the minimum wage for the period after accepting a fare – and not the time spent logged into the app and accepting new trips.
This decision, he says, directly contravenes the Supreme Court’s finding that drivers should also be paid for the time they were logged into the app and were “ready and willing to accept new trips”.
A step in the right direction
Uber is not the first gig economy employer to have fought and lost this particular battle, and it is unlikely to be the last. In 2018, delivery company Hermes lost a similar appeal relating to the status of its self-employed contractors.
Since then, like Uber, it has made improvements through its ‘self-employed plus’ status, providing benefits such as higher pay and paid annual leave, in addition to union representation for its workers. While there is a long way to go, the Uber ruling is certainly the latest of a series of steps in the right direction.
The gig economy looks to be here to stay; with a growing media spotlight on the companies that rely on gig workers, then, it is hoped that their vital contribution will continue to be recognised and increasing improvements made to their rights and job security.
Our teams regularly advise companies who operate vehicle fleets on the transport and passenger sectors. The Uber decision has an impact on many drivers employed in logistics.