Blog: What does the Uber case mean for employers?

private hire drivers

The recent Uber judgment in the Supreme Court  (full judgement available here) has provided yet more confirmation – if any were needed – that if you have someone working for your organisation as part of your workforce, delivering your products or services to your customers, then they are going to be your employees, or at least your ‘workers’.

In other words, if it looks like a duck, quacks like a duck and walks like a duck, then it’s a duck.

I’ve been surprised for just how long some employers have held out against this simple reality.  The law has been fairly clear about this for over a decade now, despite the continued valiant efforts by some employers and their legal teams to resist.

An obvious decision

The Uber decision will not have been a surprise to any employment lawyer, since it is based on a set of previous cases and a clear direction of travel that has been apparent in similar judgments in the last few years.  Uber itself would have always known that its model of treating their workers as self-employed was a challenging one under UK law and no doubt they and their lawyers have been preparing for this decision for many years.  In some ways, it is surprising that it took this long to be confirmed.  But then, it does take a long time for a case to reach the Supreme Court.

Helpfully the latest Uber judgment puts a clear final nail in the coffin of the ‘traditional’ argument that the courts and tribunals should start by taking the contractual documents at face value,  only looking for ‘worker’ status if the activities of the parties to that contract differed substantially.  These contractual documents of course claimed that the worker was entirely self-employed for all purposes.  The Uber case makes clear that the contractual documents are no longer the starting point, and that the courts and tribunals should go straight to the reality of the relationship, day to day.

The ‘Reality Test’

That ‘reality test’ shows these workers are not thousands of mini businesses in their own right, but people who worked for Uber, under a great deal of control.

I have been working with many businesses recently, large and small, to help them review and improve their approach to – and tolerance of – those who ask to work as self-employed contractors.  As a very quick rule of thumb:

  • If the contractor works for other clients at the same time as for you, does the work the way they want to do it, has their own limited company, uses some or all of their own kit, own website, does their own sales and marketing and charges you a fixed price for the project, they are very likely to be self-employed for both tax purposes and employment rights purposes.
  • If they only work for you, use (some of) your kit, work the way you tell them to, don’t sell their services via their own website or sales activities, and get paid by you by the hour/day/week, then they are very likely to be either your worker or your employee.

Now, there are many slightly different permutations of these two basic positions, but it usually takes me only 1-2 minutes of asking questions to work out whether someone is running their own small business and therefore genuinely self-employed or is working for an employer as their employee/worker.

It’s presented as a complex area of law but I enjoy cutting to the chase and helping my clients keep it simple.  I’d love to advise you on your own situation if you’re uncertain or facing challenges: please contact me at .

Luke Menzies
Director

March 2021

private hire drivers