EA Dismisses Uber Appeal against Employment Tribunal Decision
In Uber BV and ors v Aslam and ors, the EAT has dismissed Uber’s appeal against the employment tribunal’s decision that its drivers are ‘workers’ within the meaning of S.230(3)(b) of the Employment Rights Act 1996 and the equivalent definitions in the National Minimum Wage Act 1998 (NMWA) and the Working Time Regulations 1998 SI 1998/1833 (WTR). It held that the tribunal was entitled to reject Uber’s characterisation of its business as a technology platform rather than a provider of transport services, and to look beyond the contractual documentation describing drivers as self-employed contractors offering their services to passengers via the Uber app. The EAT also approved the tribunal’s finding that the drivers could be considered to be working for the purpose of the NMWA and the WTR at any time when they were logged into the Uber app, within the territory in which they were authorised to work, and able and willing to accept assignments.
The Uber business relies on a smartphone app through which customers can order and track a taxi and pay the fare. Uber treats drivers as self-employed and there is complex contractual documentation between it, the drivers and the passengers. Uber seeks to present itself as a technology platform facilitating the provision of taxi services, not as the provider of the taxi service itself. It holds itself out as acting as agent for the drivers, and its agreement with passengers states that the contract for the taxi service is between the driver and the passenger. Under the contract between Uber and the driver, the driver is not required to make any commitment to work. However, when a driver signs into the app, this usually signals that they are coming ‘on-duty’ and are therefore able to accept bookings. As for day-to-day work, prospective passengers book trips through the app. Upon receipt of a passenger request, the app locates an available driver (i.e. one who is logged in). The selected driver has ten seconds to accept the booking through the app, failing which Uber assumes that the driver is unavailable and locates another. If a driver fails to accept bookings, warning messages are generated which can lead to the driver’s access to the app being suspended or blocked (which prevents the driver working).
A number of Uber drivers brought employment tribunal claims of unlawful deductions from wages, relying on failure to pay the national minimum wage, and failure to provide paid annual leave. Two of the drivers were selected as test claimants and the employment tribunal considered, as a preliminary issue, whether the drivers were ‘workers’ for the purpose of S.230(3)(b) ERA. The tribunal found that they were. It rejected Uber’s case that the drivers were self-employed, and that it merely provided the technology platform that allows drivers to find and agree work with individual passengers. In the tribunal’s view, this characterisation of Uber’s business model and the contractual documentation created to support it did not accord with the reality of the working arrangements, which was that Uber relies on a pool of workers to provide a private hire vehicle service. As for what periods would count as ‘working time’ for the purposes of the WTR and the NMWA, the tribunal concluded that the drivers should be treated as working whenever they are in the territory in which they are authorised to drive, have turned on the app, and are ready and willing to accept fares. Uber appealed to the EAT.
The EAT dismissed the appeal. Her Honour Judge Eady QC, sitting alone, held that, following the Supreme Court’s decision in Autoclenz Ltd v Belcher and ors (Brief 934), the tribunal was entitled to find that the contractual documentation did not reflect the reality and thus that it was entitled to disregard the terms and labels used in the written agreements. The tribunal was required to determine the true agreement between the parties and, in so doing, it was important for it to have regard to the reality of the obligations and the situation. The tribunal was therefore bound to focus on the statutory language, rather than the labels used by the parties, and reach a fact-sensitive decision.
HHJ Eady QC noted that the key question was: when the drivers are working, who are they working for?
Uber submitted that the tribunal had failed to understand its argument that an agency arrangement, whereby it acted as agent in relation to contracts between drivers and passengers, was common in the private hire industry. However, in HHJ Eady QC’s view, the tribunal was not denying the possibility of individual drivers operating as separate businesses and, as such, entering into direct contracts with passengers, it was merely saying that this was not what it found to be the true position. It was entitled to take into account, among other things, the scale of the business, rejecting the notion of Uber as ‘a mosaic of 30,000 small businesses linked by a common platform’. The tribunal was also entitled to rely on its finding that drivers were integrated into Uber’s business, and were marketed as such. HHJ Eady QC also rejected Uber’s argument that the tribunal erred by taking into account features of the relationship that resulted from regulatory requirements as indicia of an employment relationship – it was not obliged to disregard factors simply because they might be seen as arising from the relevant regulatory regime.
As for the tribunal’s conclusion with regard to working time, Uber argued that the tribunal failed properly to take into account that, even while signed into the app, drivers were at liberty to take on or refuse work as they chose, or to cancel trips already confirmed, and could even work for others, including direct competitors of Uber. It therefore submitted that, in those circumstances, they were not at Uber’s disposal or working for Uber. HHJ Eady QC conceded that this aspect of the appeal had caused her some trouble. However, she was satisfied that the tribunal had grappled with this issue and reached a permissible conclusion. The tribunal had made a finding that drivers were expected to accept at least 80% of trip requests when signed in, and that being ‘on duty’ meant being ‘willing and able to accept trip requests’. Even if the evidence allowed that drivers were not obliged to accept all trips, the very high percentage of acceptances required justified the tribunal’s conclusion that, once in the territory with the app switched on, drivers were available to Uber and at its disposal.
Link to transcript: http://www.bailii.org/uk/cases/UKEAT/2017/0056_17_1011.html