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THE CASE OF WORKER STATUS


Article by Low Incomes Tax Reform Group www.litrg.org.uk


The Supreme Court has recently found some Uber drivers were ‘workers’ rather than ‘self-employed’ for employment law purposes. In this article we explain what this means and also look at why headlines like ‘Supreme Court’s decision means drivers should be considered as workers entitled to holiday and sick pay and the minimum wage’ are incorrect.


In employment law, there are three potential employment statuses – employee, ‘worker’ and self-employed. Your employment status determines the rights you are entitled to. ‘Workers’ have fewer rights than employees, but they have more rights than the self-employed, who tend to have very few legal protections. The Supreme Court has recently found some Uber drivers were ‘workers’ rather than ‘self- employed’ for employment law purposes.


WHAT IS ‘WORKER’ STATUS?


A ‘worker’ in employment law terms, is basically someone who provides work or a service as part of someone else’s business. For example, an electrician working for a single building contractor as opposed to his own domestic customers, could be classed as a ‘worker’ for employment law purposes.


Their work arrangements tend to be midway between self- employment and employment in that they do not have the ‘master/servant’ relationship that an employee has with their engager (the person or company taking them on); but neither are they entirely their own bosses, deciding how much to charge for their work, how much holiday to give themselves, and so on.


This is why ‘workers’ have a minimum set of employment rights to help protect them, including the right to be paid the minimum wage, to a workplace pension and to annual leave.


WHAT IS THE PROBLEM WITH ‘WORKER’ STATUS?


The definition of a ‘worker’ in the Employment Rights Act 1996 includes anyone employed under a contract of employ- ment but also extends to some individuals who are self-employed. This would be where that individual has: “entered into or works under any contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform person- ally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.


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(Although ‘workers’ can sometimes be defined slightly differently depending on what right you are talking about, this main Employment Rights Act 1996 definition is picked up for the main things such as minimum wage and annual leave).


This definition tells us that there are three strands to ‘worker’ status:


1) There has to be a contract between the worker and engager


2) The worker generally must carry out their work person- ally, rather than being able to send someone in his or her place.


3) The worker must not really be in business on their own account (so, the engager isn’t a client or customer of the worker’s own business)


The last bullet point is where things get difficult and techni- cal as working out whether people are in business on their own account for ‘worker’ status purposes, really starts at the same point as working out if people are in business on their own account for employee v self-employed purposes.


‘Worker’ status is basically for those who do reach the ‘pass mark’ for acquiring employee status, but even to us, there is a lack of clarity over where the line is (or should be) drawn!


WHAT DOES THIS JUDGEMENT MEAN?


In summary, Uber argued that drivers are independent contractors who work under contracts made with customers and do not work for Uber. Basically, they tried to argue that points 1 and 3 above did not apply.


The Supreme Court disagreed. It said that even though there is no written agreement between Uber and the drivers, in reality (and it is what happens in reality that counts), Uber London contracts with passengers and engages drivers to carry out bookings for it, which is the relevant legal relation- ship.


The Court also found that the drivers and services offered were tightly defined and controlled by Uber. The drivers had little or no say over their pay and working conditions because they were in a subordinate and dependent position in relation to Uber. The drivers therefore had little or no ability to improve their economic position through profes- sional or entrepreneurial skill (thus, were not in business on their own account). In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.


The judgement means that the specific Uber drivers who took the case (Mr Aslam and Mr Farrar), are entitled to certain employment rights which they were being denied.


APRIL 2021


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