Tens of thousands of Uber drivers could be entitled to £12,000 in compensation, lawyers said today after the Supreme Court ruled they should be classed as workers.
The decision could trigger a wave of litigation brought by the estimated five million people working in the ‘gig economy’.
Uber claimed that drivers were self-employed independent contractors, or ‘partners’, and so not entitled to the rights normally given to workers, such as paid holiday and the right to be paid at least the minimum wage.
However, in a much-anticipated decision, the Supreme Court agreed with the earlier decisions of the employment tribunal, Employment Appeal Tribunal and the Court of Appeal that drivers were workers.
Giving the unanimous ruling of the court, Lord Leggatt said: “The employment tribunal was, in my view, entitled to conclude that, by logging onto the Uber app in London, a claimant driver came within the definition of a ‘worker’ by entering into a contract with Uber London whereby he undertook to perform driving services for Uber London.”
He found that the services agreement between Uber and drivers “can be seen to have as their object precluding a driver from claiming rights conferred on workers by the applicable legislation”.
The justice went on to highlight the level of control Uber has over its drivers, including setting fares, imposing the contract terms on the drivers, constraining the driver’s choice about whether to accept requests for rides, not informing drivers of the passenger’s destination until they have been picked up, and using the ratings given to drivers by passengers as means of managing performance.
The case will now return to the employment tribunal to decide how much compensation drivers are entitled to.
Leigh Day, which represented the claimants and has more than 2,000 Uber clients, said drivers could be entitled to an average of £12,000 each in compensation.
Lord Leggatt also said courts should carefully scrutinise working arrangements to ensure that individuals were not denied those rights just because they are called ‘partners’ or ‘contractors’.
The purpose of employment legislation was to protect “workers from being paid too little for the work they do, required to work excessive hours or subjected to other forms of unfair treatment”.
Leigh Day also represents clients from Addison Lee and Stuart in similar workers’ rights claims, which it said were likely to be impacted by the ruling.
An employment tribunal in 2017 found that a group of Addison Lee drivers were workers. This was upheld by the Employment Appeal Tribunal in 2018. A second appeal to the Court of Appeal was put on hold in anticipation of this Supreme Court judgment.
In May 2018, a Stuart courier also succeeded in a claim that he was a worker in the employment tribunal, with this decision upheld by the Employment Appeal Tribunal in December 2019. A hearing in the Court of Appeal is due in October 2021 after a further appeal by Stuart.
Leigh Day partner Nigel Mackay said: “Our clients have been fighting for workers’ rights for many years, so we are delighted that the end is finally in sight.
“Uber has consistently suggested that the rulings only affect two drivers, but Leigh Day will be claiming compensation on behalf of the thousands of drivers who have joined its claim.
“For many of the drivers that Leigh Day represents, the claims could be worth thousands of pounds in compensation.”
One of its clients, Mark Cairns, an Uber driver in London for five years, said: “It’s been a long time coming but I’m delighted that we’ve finally got the victory we deserve. Being an Uber driver can be stressful. They can ban you from driving for them at the drop of a hat and there’s no appeal process.
“At the very least, we should have the same rights as any other workers and I’m very glad I’m part of the claim.”
Katie Maguire, an employment partner at national law firm Devonshires, said: “This landmark ruling has huge implications for those who work for Uber, but also the gig economy generally. It will help improve the lives of around five million people who work within the UK gig economy by granting them workers’ rights.
“The ruling will come as a blow to Uber and other companies using gig economy workers and they will now need to alter their business models. This may well result in increase in costs that they face as a result of this judgment being passed on to the consumer.”
Beverley Sutherland, managing director of Crossland Employment Solicitors, commented: “While all of these cases very much turn on their own facts – as can be seen by the differing decisions in Deliveroo and CitySprint, this decision by the most senior court in the country seems to set a different tone, really focusing on the need for protection of those who are tightly controlled by their masters and who do not have the ability to improve themselves and develop and their only way of increasing their earning power is to work harder.
“This change of emphasis is likely to catch most in the gig economy and there are many other cases in the process of appeal.”