friday, 28 october of 2016

Uber loses right to classify UK drivers as self-employed

Drivers for Uber have won a landmark case after employment tribunal judges ruled that they were not self-employed and should be paid the “national living wage”.

The case, taken by two workers, could open up the tech firm to claims from all of its 40,000 drivers in the UK, and force other companies with tens of thousands of workers in the so-called gig economy to review the way they employ staff. Uber said it will appeal against the finding.

The ride-hailing app had argued that it was a tech firm and that its drivers were independent self-employed contractors who can choose where and when they work. As a result, they were not entitled to rights granted to workers, including holiday pay and the national living wage, introduced by George Osborne last year to replace the minimum wage for workers over 24.

At a tribunal hearing in July, lawyers for two drivers argued that the terms and conditions of their work with the company meant that they were operating as workers. One told how he was put under “tremendous pressure” to work long hours and accept jobs, and said there were “repercussions” from the company if he cancelled a pickup. He said some months he earned as little as £5 an hour.

On Friday, the employment tribunal announced that it had found in the drivers’ favour. The ruling means that these workers and others who signed up to make a claim could be entitled to compensation for missed holiday pay and back payments for work paid at rates below the national living wage of £7.20 an hour.

Other drivers with the firm will not automatically receive payouts, but if the firm accepts the ruling it will have to change its contracts to avoid more cases being taken by drivers. Lawyers say that its terms and conditions are similar for all of its UK employees.

Nigel Mackay from the employment team at law firm Leigh Day, which represented the drivers, said: “We are pleased that the employment tribunal has agreed with our arguments that drivers are entitled to the most basic workers’ rights, including to be paid the [national living wage] and to receive paid holiday, which were previously denied to them.

He added: “This is a ground-breaking decision. It will impact not just on the thousands of Uber drivers working in this country, but on all workers in the so-called gig economy whose employers wrongly classify them as self-employed and deny them the rights to which they are entitled.”

Uber can take its case to the employment appeal tribunal and, if it is unsuccessful there, the court of appeal and supreme court. It said it planned to appeal.

Jo Bertram, regional general manager of Uber in the UK, said: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.

“The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it.”

The GMB union, which took up the case for the drivers, said that it was a “monumental victory” which would have an impact on thousands of workers in other industries “where bogus self-employment is rife”.

Maria Ludkin, GMB’s legal director, said: “Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees. This outcome will be good for passengers too. Properly rewarded drivers are the same side of the coin as drivers who are properly licensed and driving well-maintained and insured vehicles.”

She added: “GMB puts employers on notice that we are reviewing similar contracts masquerading as bogus self-employment, particularly prevalent in the so called ‘gig economy’. This is old-fashioned exploitation under new-fangled jargon, but the law will force you to pay GMB members what they are rightfully due.”

The judgment is likely to be closely read by lawyers for other fims operating in the gig economy, and GMB said it had other workers lined up to take action across different sectors.

Research by Citizens Advice has suggested that as many as 460,000 people could be falsely classified as self-employed, at a cost of up to £314m a year in lost tax and employer national insurance contributions.

Four courier firms are already facing legal action from workers who want similar recognition as staff employees and the rights that go with that status. The first of their cases is scheduled to be heard in November.

There are signs of growing disquiet with companies that have large self-employed workforces. Recently, the government has announced a six-month review of modern working practices and said that HM Revenue & Customs would have a new unit, the “employment status and intermediaries” team, to investigate firms.

MPs launched an inquiry on Wednesday into pay and working conditions in the UK which will look at the status and rights of agency and casual workers and the self-employed for the purposes of tax, benefits and employment law, and how to protect them.

(Published by The Guardian - October 28, 2016)

latest top stories

subscribe |  contact us |  sponsors |  migalhas in portuguese |  migalhas latinoamérica