Uber has lost its bid for the Supreme Court to overturn a 2024 Court of Appeal decision that found four Uber drivers were employees.
Uber is a multinational transportation application that provides ridesharing and food delivery services to users.
The Case
In 2022 four Uber drivers took the ridesharing company to the Employment Court over their employment status, arguing the true nature of their employment relationship was that they were employees, not independent contractors.
Under the current arrangements, Uber drivers do not get the entitlements of an employee. The four drivers argued they should be entitled to minimum employee benefits such as leave entitlements, holiday pay, and minimum wage.
Uber argued it was simply a platform provider, and the real business relationship was between the drivers and its passengers. Its position was the flexibility enjoyed by its drivers, who could choose their own hours, work for competitors, control their expenses, and maximize incentives, made them independent contractors.
All five Supreme Court Justices unanimously rejected Uber’s position, declaring that the Uber drivers were in fact, employees.
Why the Uber Drivers Won
Three Supreme Court Justices took the view Uber’s model exercised significant control of its drivers through fare setting, disciplinary action, ratings systems, and app protocols. They noted drivers had no ability to influence how much work they received or what they were paid.
One Justice found that the opportunity for the drivers to grow their own businesses was “effectively non-existent”. They could not set their rates and were banned from contacting passengers directly. They were not free to organise their own work, apart from when or if they logged onto the app. There was little or no ability to improve their commercial position through developing their professional or entrepreneurial skills.
The two other Justices noted the lack of control drivers had and their inability to develop their own businesses were factors which outweighed drivers being able to choose their own hours, work for competitors, and own their own vehicles.
While this judgement only applies to the four drivers, this decision will likely be far reaching and pave the way for future claims from drivers seeking compensation for historical underpayment of wages and entitlements.
‘Real’ Nature’ of the Relationship
This case reinforces that the ‘real nature’ of the relationship between parties will be looked at by the Courts and not just a written contract or way the parties describe each other .
If you are an employer, before you engage someone as an independent contractor, seek advice from us. The repercussions if you get it wrong can be very expensive.
