Uber Drivers in the UK – Employees or Contractors?

My Spend Matters US colleagues have generally written in positive terms about the Uber taxi service for several years now, highlighting the ease of use, the ability to see where your car is on your Smartphone, automatic billing and a number of other advantages. I confess – I have not used Uber yet, although I have been our for dinner / drinks now with a number of friends who have called an Uber car at the end of our sojourn, and I must admit, it all looks very good.

But in some countries , there has been significant pushback against the firm on a number of counts. Now in the UK, Uber drivers backed by the GMB Trade Union are taking legal action to establish that they are workers (employees), rather than contractors or partners.

As Wired magazine reported: “Legal action in the UK comes just weeks after a California court ruled a driver for Uber was an employee, not a contractor. Uber insisted the ruling only applied to the individual driver making the claim and said it would appeal the ruling”.

This is raising some important issues that matter for line managers in organisations, as well as HR professionals and of course procurement. Engagement of contractors (or contingent workers, or consultants, or whatever else we call them) takes us into the realm of “third party spend” and therefore procurement’s sphere of interest. If they are employees, then they’re not our problem! So procurement people need to have a good understanding of the issues here – you may be called on to advise your organisation on the right way to engage people.

Workers have more statutory protection and legal rights than contractors in most countries, and the tax treatment is usually quite different too. But it is often difficult to establish just what the relationship is – we highlighted a current issue recently in the UK Department of Health for instance, whereby individuals certainly seem to be working as employees, but have been employed for years as contractors / consultants.

In a short briefing note on the Uber case, Employment Solicitor Nick Hawkins of Stewarts Law says:

“Determining the employment status of an individual is not always straightforward. A broad definition of a worker is an individual who has entered into or works under a contract of employment or any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract. The degree to which the GMB are able to successfully argue that Uber drivers fall under that definition will require a close look at the factual make-up of the working relationship between Uber and the drivers."

How much freedom or flexibility does the individual Uber driver really have? That is a key determinant of whether anyone is considered by the courts to be an employee or a contractor. That might be interesting and in the balance in this case, as Uber drivers have considerable flexibility (I believe) in terms of the hours they work, for instance; but are very constrained in other ways, such as the systems they use, the prices they charge and so on.

It’s a tough one, but one key test is this – could the work be sub-contracted? In the case of Uber, I don’t know the answer to that. Their drivers have to pass some sort of accreditation, but I guess they could “sub-contract” to another registered driver. So I think it is a close-run thing, but my money (only marginally) is on the firm winning this one.

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