Sarah Cochrane

The UK Supreme Court has handed down its much-anticipated judgment confirming that those engaged by Uber were ‘workers’ and not self-employed contractors as contended by Uber. The distinction is important given that workers have various protections that are not afforded to the genuinely self-employed, including the right to be paid national minimum wage and the right to paid holiday.

The decision serves as a further reminder to companies, and particularly those operating within the gig economy, that the label placed on individuals at the outset of a relationship will have little bearing if it does not reflect what is happening on the ground.

Lord Leggatt, giving the sole judgment in the case, and recognising that there is often an imbalance of power between a company and those that it engages to perform work, states that it would be inconsistent with the purpose of the legislation to “treat the terms of a written contract as the starting point in determining whether an individual falls within the definition of a worker… It is the very fact that an employer is often in a position to dictate such contract terms and that the individual performing the work has little or no ability to influence those terms that gives rise to the need for statutory protection in the first place”.

Uber drivers were held to operate in an environment which was “very tightly defined and controlled by Uber” and therefore not reflective of self-employed status. Whilst companies can of course continue to engage individuals on a self-employed basis, this decision reinforces the need to carry out a full assessment as to the reality of the relationship.

Genuine autonomy and control over one’s own work are key indicators of self-employed status and if affording such independence is not practicable, employers need to give serious consideration to whether it is appropriate to engage workers or indeed employees. Such an assessment at an early stage will not only seek to ensure that individuals receive appropriate protection but also will mitigate against potential costly claims against the company in the future.

This judgment, together with the changes to IR35 and “off payroll” working that come into effect on 6 April 2021, pushes the issue of employment and worker status back to the top of the agenda.

• Sarah Cochrane is a senior associate in the employment team at Carson McDowell.