Uber lost a groundbreaking battle at the UK’s highest court, which ruled Friday that the drivers are employees entitled to rights such as the minimum wage in one of the most important labor cases for decades.
The Supreme Court ruled in favor of 35 Uber drivers who first brought the case in 2016, arguing that they were not self-employed because Uber controlled much of their work, divided their customers and dictated their rates.
Lord George Leggatt, one of the Supreme Court justices, said it had ruled unanimously against Uber. “Drivers are in a position of subordination and dependence on Uber, so that they have little or no ability to improve their economic position through professional or entrepreneurial skills,” he said as he delivered the verdict.
The ruling entitles drivers to holiday pay and minimum wages in the UK and obliges Uber to set up a workplace pension plan.
It also said drivers should be considered working for Uber for as long as they were signed into the app, rather than just for the time they were traveling. Mick Rix, GMB national officer, called the ruling a “historic victory”.
The magnitude of the blow to Uber, in one of its largest markets, could be significant. An employment court will now assess how much compensation the drivers are entitled to, and the ruling opens the way for other Uber drivers to sue the company.
Leigh Day, the law firm that is contesting the case for some of the drivers represented by the GMB union, believes the drivers could each be entitled to £ 12,000 in damages.
Paul Jennings, a partner at law firm Bates Wells, which represented the Uber drivers, said there were at least 15,000 claims from other drivers who had been waiting for the decision. “The judgment goes to the heart of their business model and could lead to a significant increase in claims,” he added.
“There are millions of people in this new industry and there are clear parallels in terms of how companies in the gig economy operate – for this reason, the Uber verdict is hugely important.” he said.
Last November, Uber spent a lot of money on a campaign to tone down new labor rights laws in California. A public vote gave the company the right to continue to classify its drivers as independent contractors.
Lawyers in the UK predicted that the ruling would also affect some competing gig economy companies. Paul Chamberlain, chief of labor law at JMW Solicitors, said the ruling “could be decisive for similar cases involving employee status and is likely to encourage those working in gig economy roles to file claims to waive their rights as employees. force”.
In the UK there are two types of employment status – “workers” and “workers”, both of which are entitled to the minimum wage and holiday pay, but only workers have broader rights, such as a charge of unfair dismissal. Independent contractors do not have any of these rights.
Joe Aiston, a senior associate at law firm Taylor Wessing, said that any move Uber made to hire its drivers as employees “would almost certainly mean passing on these costs to Uber’s customers in rate hikes,” making the company less competitive. to become.
Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said Uber had “made some significant changes to our business,” including free insurance for drivers in the event of illness or injury. “We are committed to doing more and will now consult every active driver in the UK to understand the changes they want to see,” he said.