Reality “on the ground”

When deciding whether drivers were workers in Uber BV v Aslam and ors, the Court of Appeal has held that, although the relationship between the parties was presented in the written documentation as being one of self-employment, the tribunal was right to focus on what happened in reality between them.

Basic facts

Uber operates a smartphone app which customers can download in order to book a private hire vehicle (PHV).  Uber operates through different legal entities, including Uber London Ltd which holds a PHV licence for London; and Uber BV which is the parent company of Uber London Ltd. There are complicated contractual terms which govern the relationship between Uber and the drivers, but which essentially provide that the drivers are self-employed. 

The drivers can sign up to the right to use the app online but they must attend a specific location, produce documents and undergo a form of induction.  They provide and maintain their own vehicle and pay for a PHV licences. Once they have signed up with Uber, the drivers cannot transfer the app to anyone else. 

When a customer makes a request, the app locates the driver who can either decline or accept the job.  However, a driver has to accept 80 per cent of requests to retain account status.  Drivers who decline three trips in a row are forcibly logged off.  A rating system also applies where passengers are asked to rate the driver.  A driver who has undertaken 200 trips or more and scores an average below 4.4 is subject to a “quality intervention” and if their rating does not improve to 4.4 or above, they have their account deactivated.

A number of Uber drivers in London brought tribunal claims arguing that as workers under section 230(3)(b) of the Employment Rights Act, they were entitled to be paid the minimum wage and to have their working time calculated according to the Working Time Regulations (WTR).

Tribunal and EAT decisions

The tribunal found that the drivers were workers.  Applying the Supreme Court’s decision in Autoclenz Ltd v Belcher and ors, the tribunal held that the written contractual documents did not represent the reality of the working relationship. In particular, it held that there was no contract between the drivers and the passengers and that Uber London Ltd controlled the drivers. 

It further concluded that the drivers were workers whenever they logged on to the Uber app, were within the territory in which they were authorised to work (in this case, London) and were able and willing to accept assignments.

The EAT held that the tribunal was right to determine the true agreement between the drivers and Uber London Ltd and in doing so it was important for the tribunal to have regard to the reality of the obligations.  The starting point was the statutory provisions and not the label.  The fact that the written contract described the drivers as self-employed did not mean that the drivers could not be workers.

Decision of Court of Appeal

By a majority, the Court agreed with the tribunal that “it is not real to regard Uber as working for the drivers and that the only sensible interpretation is that the relationship is the other way round”.  The Court considered that the fact that Uber subjected drivers, by means of a rating system, to what amounts to a performance management/disciplinary procedure was a powerful indicator in supporting the case that the drivers work for Uber London Ltd.

The Court considered that the point at which the driver could be said to be working at Uber’s “disposal” was more difficult to answer but agreed with the tribunal that this was when the driver had the app switched on, was in the territory and was ready and willing to accept trips.