An Employment Tribunal has found that Uber taxi drivers must be treated as permanent staff and are entitled to receive the National Minimum Wage and holiday pay. This important ruling will have an impact on the thousands of other Uber drivers who have previously been regarded as self-employed.
The Employment Tribunal rejected the argument that Uber just enabled the individuals to work for themselves as taxi drivers through the technology it offered. Instead, it was considered a business supplying transportation services.
The ruling today does not mean that the Uber drivers are ‘employees’ with employee rights, they are not going to be able to claim unfair dismissal or redundancy pay. They will be classed as a ‘worker’ as opposed to an ‘employee’ and therefore have no right to receive work and are under no obligation to carry out the work. However their ‘worker’ status does mean that they will have certain protections. There is a minimum requirement of 5.6 weeks paid leave per year and the National Living Wage is £7.20 per hour.
The consequences will be far reaching not just because Uber may face claims in respect of the minimum wage and pay for holidays taken, but also because of the tax consequences as HMRC will now expect PAYE deductions to be made from payments to the drivers.
Looking at this in a wider context the ruling could signal that the employment status of many other ‘self-employed’ contractors will now be looked at more closely.
Uber has confirmed that it will appeal the ruling.