Uber faces paying millions of pounded in compensation to up to 60,000 drivers after the Supreme Court ruled today that they are ‘workers’ and are entitled to minimum wage and holiday pay in a landmark decision that could have seismic implications for the gig economy.
Seven justices ruled on the latest round of a long-running fight between taxi firm and its motorists. The ride-hailing giant had argued its drivers are independent contractors and so not entitled to employment benefits.
But today, bringing to end a five year battle, they lost their last roll of the dice as justices threw out their appeal in a ruling will have massive implications for the estimated 5.5million people working in the UK gig economy.
It sent shockwaves through the sizable sector as companies braced themselves for action from workers wanting more rights.
Mark Cairns, an Uber driver in London for five years, said in a statement: ‘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.’
The huge day for the gig economy saw:
- Lawyers said workers could try to claim back as much as £12,000 compensation
- Drivers may now get holiday and sick pay and the national minimum wage
- Union GMB said it would be speaking to union members about next steps
- Other businesses running in the gig economy could have to give workers’ rights
- It may pave the way for 5.5million in the sector to take action against bosses
- Just Eat announced new worker model introduced in November with employment rights has been expanded into Birmingham
Uber drivers of the App Drivers & Couriers Union, celebrate as they listen to the court decision
It means the taxi company could be hit be series of compensation claims after the court rule
Uber drivers Yaseen Aslam (left) and James Farrar (right) outside the Supreme Court, London
An employment tribunal ruled in 2016 that Uber drivers were workers, and were entitled to workers’ rights.
That ruling was upheld by an employment appeal tribunal, and by Court of Appeal judges.
Lawyers representing Uber operating companies told Supreme Court justices that the employment tribunal ruling was wrong.
They said drivers did not ‘undertake to work’ for Uber but were ‘independent, third party contractors’.
But lawyers representing drivers said the tribunal was entitled to conclude that drivers were working.
A law firm enlisted by the GMB union to represent Uber drivers says they will now be entitled to compensation for lost pay.
Leigh Day lawyers think tens of thousands of Uber drivers could be entitled to an average of £12,000 each.
A Leigh Day spokeswoman said the case would return to an employment tribunal, for decisions to be made on how much compensation drivers should get.
Paul Chamberlain, Head of Employment at JMW Solicitors, agreed: ‘This is a landmark case for the gig economy – lawyers acting on behalf of the drivers estimate that Uber could be liable to pay workers an average of £12,000 in compensation, along with holiday pay, sick pay and at least the national minimum wage.
‘Uber cannot appeal the decision further, so we may see the business looking to pass on its increased operating costs to customers using the platform.
‘Today’s decision could be decisive for similar worker status cases and is likely to encourage those employed in similar gig economy roles to bring claims to enforce their rights as workers.’
A GMB spokesman described the court ‘win’ as historic.
Uber drivers with Yaseen Aslam (second right) outside the Supreme Court, London, today
‘I can finally go on holiday without worrying how to pay for it’: The victorious Uber drivers who brought battle against bosses
Mark Cairns, an Uber driver in London for five years, said in a statement: ‘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.’
James Farrar (above) said: ‘This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery. Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.
‘The reality has been illegally low pay, dangerously long hours and intense digital surveillance. I am delighted that workers at last have some remedy as a result of this ruling, but the Government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal.’
Uber driver Conrad Delphine said he would now be able to have a holiday after years of working for the company with no holiday or sick pay.
He said: ‘I am very pleased. It means I can go on holiday without having to worry about how to pay for it. Things have been worse because of coronavirus. If we catch the virus we should be entitled to sick pay. It’s about time we had some decent pay and conditions.’
Yaseen Aslam (above), another lead claimant in the case, said: ‘I am overjoyed and greatly relieved by this decision which will bring relief to so many workers in the gig economy who so desperately need it. During the six years of these proceedings, we have watched the Government commission and then shelve a review of the gig economy yet do nothing to help us.
‘I hope in future the Government will choose to carry out its duty to enforce the law and protect the most vulnerable from exploitation.’
Mick Rix, GMB national officer, said: ‘This has been a gruelling four-year legal battle for our members – but it’s ended in a historic win.
‘The Supreme Court has upheld the decision of three previous courts, backing up what GMB has said all along; Uber drivers are workers and entitled to breaks, holiday pay and minimum wage.
‘Uber must now stop wasting time and money pursuing lost legal causes and do what’s right by the drivers who prop up its empire.
‘GMB will now consult with our Uber driver members over their forthcoming compensation claim.’
Mary Walker, partner and employment specialist at law firm Gordons, said: ‘This decision by the Supreme Court emphasises that the reality of a working relationship is the main factor when considering worker status.
‘It has a massive impact on the whole gig economy. The resulting ability for the Uber drivers to claim backpay for minimum wage and unpaid holiday pay will have many gig businesses reviewing their practices and the associated risks as a matter of urgency. The ripples from this decision will travel far.’
Fudia Smartt, employment law partner at London-based Spencer West LLP, said: ‘The Uber judgment will have a massive impact on the gig economy; with many more individuals who are currently deemed to be self-employed gaining valuable rights such as holiday pay and an entitlement to the National Minimum Wage.
‘Given this decision means that millions of people who work in the gig economy may now be entitled to up to two years of back holiday pay and potentially much more in any National Minimum Wage arrears, the financial impact of this cannot be underestimated, and it will be interesting to see how businesses respond to this judgment.
‘This is particularly relevant due to the impact Covid-19 and Brexit is currently having on the UK economy.
‘Perhaps this will give Parliament the final push it needs to revisit the issue of employment status once and for all.’
Union officials said the ruling had implications beyond Uber.
Scottish TUC general secretary Roz Foyer said: ‘This ruling has enormous implications for employment law which go beyond Uber to the wider gig economy.’
The Association of Independent Professionals and the Self-Employed said there was a ‘glaring need for clarity’ – and urged the Government to introduce a statutory definition of self-employment.
‘The very fact this case has come to the UK’s Supreme Court shows the UK’s employment law is not working,’ said the association’s director of policy, Andy Chamberlain.
‘There is a glaring need for clarity in this area, to clear the confusion in the gig economy.
He added: ‘The gig economy is enormously complex, including many people who are legitimately self-employed and many others who really, based on their working circumstances, should be classed as workers.
‘It is a patchwork of grey areas between employment and self-employment: the only way to resolve this tangle is to clarify employment status in UK law.’
Frances O’Grady, general secretary of the TUC, said: ‘Unions will continue to expose nasty schemes that try and cheat workers out of the minimum wage and holiday pay, but we also need the government to step up to the plate.
‘Ministers must use the much-delayed employment bill to reform the law around worker status.
‘Everyone should qualify for employment rights unless an employer can prove they are genuinely self-employed.’