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Uber loses appeal as tribunal in the UK rules that it must treat its drivers as ‘workers’

Another important legal battle in the UK has been lost by Uber, after a London tribunal rejected its appeal against the verdict that it must treat all its drivers as ‘workers’. To do so would mean that all of Uber’s drivers in the UK would be entitled to minimum wage in addition to holiday pay, something which Uber, and the ‘gig economy’ as a whole is looking to avoid.

This is just one of a number of challenges the US tech firm has faced in trying to establish itself in the UK, and it is no stranger to defending itself in UK courts. The UK is Uber’s most important market in Europe, and it will be looking to avoid too many more challenges in the courts.

The tech firm was told earlier this year that its approach was unacceptable for operation in the capital. The removal of their licence to operate was threatened by Transport for London, who are in charge of regulating traffic in the city. They said that working conditions for Uber’s drivers must improve if they wanted to retain their licence.

Uber will appeal the decision, and has made it clear that it will take the appeal to the Supreme Court if necessary

Judge Jennifer Eady, the appeal judge in charge of the case, wrote: ‘‘I am satisfied the [employment tribunal] did not err either in its approach or in its conclusion’, as her response to the tribunal rejecting the argument that Uber put forward that their role is in connecting independent drivers to customers.

Uber plans to appeal the decision once more in the Court of Appeals, and has said it is willing to take the case to the Supreme Court. The appeals process could take years if Uber exhaust all of their legal options, which is looking likely at this stage.

The acting general manager for Uber, Tom Elvidge, said that: ‘‘Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal.’

The outcome of the case, once it has reached its conclusion, will be of massive importance to the operation of Uber in the UK. With 50,000 people currently driving for them in the UK, if it were to be forced to treat them as ‘workers’ it would mean it would need to provide all of them with holiday pay as well as a minimum wage. 

Responding to this potential outcome, Uber has said that in order to provide this for their drivers, it would mean they would have to start scheduling drivers for shifts, getting rid of the freedom to ‘log on’ to work if, and when they choose, something which has attracted a large number of drivers.

On top of treating their drivers as workers, Uber may face a much larger tax bill in the UK. This is due to the fact that they will be forced to contribute to national insurance payments, on top of value added tax.

A group of MPs in the UK are set to introduce a draft bill which will look to provide rights and added protection to people working ‘gigs’. Frank Field, the chairman of the work and pensions select committee, said that by introducing this new bill, it would ‘make these individual, but important, skirmishes a thing of the past, as legislation would protect all workers in similar situations.’

In 2016, Theresa May commissioned an independent review into the gig economy, but is yet to announce whether she plans to introduce any of the recommendations of the review. A key point raised by the review was that workers would be given more rights, while their ‘employers’ would have a level of flexibility surround the minimum wage rules.

Uber is far from the only tech company facing legal action, and there is widespread fear across the ‘gig economy’ that there will be ramifications for everyone as a result of the Uber ruling. Uber is the most high profile of the cases which is being heard, and it will serve as an example of how the UK will accept ‘gig’ workers as independent employees.

James Farrar, one half of the Uber drivers that took the case to the courts, said: ‘Uber cannot go on flouting UK law with impunity and depriving people of their minimum wage rights.’

Paul Jennings, a partner at the law firm Bates Wells Braithwaite, who took the drivers’ case to court, said: ‘We are delighted with today’s judgment, which is ethically and legally the right outcome.’

The food delivery service, Deliveroo, who work on the same gig basis that Uber works on, is facing action from some of their couriers, who argue that they are not entirely ‘self-employed’.

Other companies who are working the ‘contractor’ model that are facing their own legal battles include taxi firm Addison Lee, Pimlico Plumbers and courier company CitySprint.

The chief executive of a gig economy app who did not want to be named said before the judgement that the whole ‘on-demand’ economy would face difficulties if Uber were to lose its case. He said: ‘I think it would be a shame if the politicians and courts together ignore what is the will of the hundreds of thousands of people who sign up for this kind of work, which is increasing week on week on week, all around the world.’

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