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Updates in Employment Law & HR Advice for Businesses

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GMB Union seeks Employee status for Uber taxi drivers

In a recent publication GMB, the union of professional drivers, is seeking legal action on behalf of its members against the taxi service provider Uber. The union aims to secure the drivers’ rights to be paid the national minimum wage, entitlement to holiday pay, health and safety safeguards and redress for failures regarding discipline and grievance procedures.

The union will seek a declaration that the Uber drivers are ‘employees’ and as a result, they should be accorded rights due to employees under employment law.

The rebuttal advanced by Uber is that the drivers are “partners” who work in a self-employed capacity and consequently not afforded the same rights conferred on employees.

Legal definition

An employee is defined by legislation under S.230 Employment Rights Act 1996 as “an individual who has entered into or works under a contract of employment”. In practice however, there is no single determining factor that clearly labels one’s employment status. The Court of Appeal ruling in Stringfellows v Quashie [2012] emphasised some necessary elements:

  • The employee must provide a personal service and perform the contract personally
  • The employer must have sufficient control regarding how and when the employee performs the duties of the employment
  • A relationship of mutual obligation must exist whereby the employer is under obligation to provide work and the employee is under obligation to accept work
  • The economic reality must indicate that the employee is not in business for their own account

What indicates employee status?

In case of a dispute, a court will decide the employment status based on all the circumstances of the case and goes beyond the label both parties have put on the worker’s status. Usually, if workers receive their pay after tax deduction through PAYE and national insurance deduction, are subject to disciplinary procedures if they do not turn up for set shifts and are given instructions on how and when to perform their duties, then these are indicators that they are employees.

On the contrary, if the workers are responsible for paying their own tax and national insurance contributions through self-assessment, are free to set which shifts they want to work, use their own equipment and have to pay for its maintenance, have sufficient discretion over which jobs to take up and the flexibility in how they perform their duties then such would be indicative of a self-employed or independent contractor status.

Impact of a finding of employee status

If held that the drivers are employees, they would be entitled to the rights granted under employment law. Accordingly, the GMB union is demanding that “Uber should conform to employment law and ensure that drivers are paid the national minimum wage and receive statutory paid holiday and ensure its drivers take rest breaks and do not work over a maximum number of hours per week”. The Union also wants it to be a requirement for Uber to implement a proper complaints system to stop drivers being suspended without an opportunity to challenge decisions. This is likely to have a financial impact on Uber as they have to treat the drivers as employees.

The need for assessment of status

To prevent the possibility of complications arising, it is good practice for employers to assess and establish the status of all workers. A key consideration in this is that an employee status is implied if one works under a contract of employment. A Court will take into consideration the terms of the contract, but will go beyond and consider the practical realities of the working relationship. It therefore becomes imperative for employers to clearly evaluate the status of all their staff and ensure the proper and accurate contracts are in place and what rights these members of staff are accorded under employment law. Employers, and workers alike, should consider the facts and assess whether they point towards being independent contractors or employees under an employer’s control.

If you require advice on the status of your staff or require appropriate contracts to be drafted for employees or independent contractors please contact KLG on 0808 1151 040 for specialist employment law advice and services.

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