An Employment Tribunal has, this afternoon, ruled that two 'Uber' drivers are actually 'workers' within the meaning of the Employment Rights Act 1996, and not self-employed contractors as Uber had claimed.
In this case it has been decided that the drivers are 'workers' rather than 'employees', but this still provides Uber drivers with more rights than they had as self-employed contractors.
Among other rights, they will be entitled to 5.6 weeks' paid annual leave each year and the national living wage.
Over the years, various tests have been developed by the courts to distinguish those workers who are in business on their own account from those who are classed as employees, but it has been very difficult to find a single test that is entirely satisfactory.
Generally a person will be self-employed if the following apply:
they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
they can decide what work they do and when, where or how to do it
they can hire someone else to do the work
they’re responsible for fixing any unsatisfactory work in their own time
their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
they can work for more than one client
Uber are just one of many companies likely to be facing similar claims. They will find it difficult to justify the 'self employed' status and this will have repercussions in terms of unpaid tax and penalties.
The government has recently launched an inquiry into the future world of work, which will focus on the status and rights of agency workers and the (so called|) self-employed.