Uber drivers’ legal battle highlights issues of ‘self-employed’ contracts

News Article

Cab hire service, Uber, is facing an employment tribunal hearing after claims from two of its drivers that the firm’s failure to offer holiday and sick pay is unlawful.

The test case, described as “the case of the year in UK employment law”, hinges on whether the drivers are self-employed or deemed to be employees of Uber.

The legal challenge comes in the wake of an investigation by the Guardian newspaper, which revealed 10,500 Hermes parcel delivery couriers also work on similar self-employed contracts. This perfectly legal arrangement means that they are not entitled to the national living wage, pension contributions, or holiday or sick pay.

The Uber test case also claims that the cab firm acts unlawfully by deducting sums from drivers’ pay for customer complaints.

The tribunal’s ruling is not expected for several weeks, but a decision in favour of the two Uber drivers may lead to many more self-employed contractors coming forward with claims of unlawful employment arrangements.

Lara Murray, an employment law expert with Palmers, said: “Self-employment arrangements can be beneficial for both the employer and the contractor, provided they are operated in a correct and genuine manner.

“Although self-employed contracts mean that employers do not have to deal with the burden of holiday and sick pay, the flipside of this, is that they cannot insist on an individual working set times, which could be problematic for companies that need to maintain consistent service delivery.

“This test case will need to look, in detail, at how much control Uber has tried to exert over its ‘self-employed’ drivers and this could prove to be the determining factor when deciding their true employment status.

“A number of companies who, like Uber, rely heavily on self-employed workers, will no doubt be watching carefully as the outcome could have implications for their business operations model.”

For more information on Palmers employment law services including advice relating to employment tribunals, please contact us.