Uber ruling will affect the ‘gig economy’ here

UBER’S decision last week to treat its drivers across the UK as ‘workers’ will have been keenly watched by self-employed people working in the so-called gig economy in NI, and those employers who use them.

The move by Uber followed the UK Supreme Court’s ruling last month in Uber BV and others vs Aslam and others, which said those engaged by Uber were ‘workers’ and not self-employed contractors as contended by Uber. The distinction is important because workers have various protections not afforded to the genuinely self-employed, including the right to national minimum wage and the right to paid holiday.

Now Uber has agreed to designate its thousands of drivers as workers and give them those additional benefits, including enrolling eligible drivers in their pension scheme, the case could open the floodgates for similar cases across a range of sectors that use casual workers.

Cases brought in relation to worker status are not only important for determining individuals’ rights going forward, but those deemed to be workers (or employees) will likely seek back pay for any time they were not previously afforded those rights.

The Uber case recognised there’s often an imbalance of power between a company and those it engages to perform work – with the employer usually dictating the contract terms and the individual having no real ability to influence, for example, when they work. Uber drivers were held to operate in an environment which was “very tightly defined and controlled by Uber” and not reflective of self-employed status.

The wider lessons learned from the judgment will force employers in a number of sectors in NI — for example hospitality — to consider whether it is appropriate to engage their workforce on a self-employed basis. Genuine autonomy and control over your own work are key indicators of self-employed status. Employers should ask themselves whether there is any material difference in the way that workers are treated, to those who are engaged as self-employed. Could anyone looking in tell the difference? If not, regardless of the label being placed on the individuals, they may not, if challenged, be deemed to be self-employed.

The Uber judgment is an important ruling for those individuals who have been wrongly categorised by employers and who may have been unfairly treated when it comes to benefits such as receiving the national minimum wage and paid time off. But it is important to remember there are many individuals who are not only labelled as self-employed but who genuinely are — they have autonomy over when, where and how they perform their roles. The impact of the Uber decision on those individuals may be a reluctance by employers to risk engaging anyone as self-employed, even where the self-employed threshold is met. The upcoming changes to the IR35 and “off-payroll” rules will likely compound this mind-set and further discourage employers from engaging the self-employed.

The Uber decision gives people within the gig economy a lot to think about. If affording the independence that comes with self-employed status isn’t practical then employers need to give serious consideration to whether it is appropriate to instead engage workers or indeed employees. Such an assessment at an early stage will not only seek to ensure individuals receive appropriate protection but also will mitigate against potential costly claims for back pay in future.