What Your Small Business Needs to Know About the Uber v Aslam Supreme Court Decision

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YBKBS Small Business News for Smart Business owners What your small business needs to know about the Uber v Aslam Supreme Court Decision.
The Uber v Aslam Supreme Court Decision creates huge repercussions for Small Business owners and freelancers.
Today, Friday 15th February, the Supreme Court gave its long awaited input into a long running legal fight from Uber – a case known as Uber v Aslam & Others. 

The basic question for the judges was, were Uber drivers ‘workers’ or ‘self-employed contractors’. 

Steven Mather

Steven Mather

Business Lawyer and Author.

One of the countries leading litigation lawyers in the UK with 13 years experience and counting.

Uber’s ‘Defence’

Uber has defended the matter since an Employment Tribunal a number of years ago decided that Mr Aslam was a worker and therefore was entitled to the rights of a worker – minimum wage in particular. He had claimed that he should be paid minimum wage while working – from the moment he switched on the Uber app to when he closed it down for the the day – rather than just be paid per ride given to paying customers. 

Uber’s position has always been that the drivers are self employed contractors. The drivers decide whether to work or not, how long to work, they have to be insured and have their own vehicle and cover all of the vehicle costs themselves. 

What your small business needs to know about the Uber v Aslam Supreme Court Decision ybkbs small business news for smart business owners

What The Court Said

The Court’s view – which is agreed by the Supreme Court, the highest Court in the UK – is that the drivers were in fact workers. 

And while I’m no QC working at the Supreme a court level, the decision stems from what I call the spade test. If it looks like a spade, works like a spade, it’s probably a spade.  I know you can do a similar test with ducks apparently.

Anyway, the nub is this: Uber referred to all the written agreements they have, their contracts with the drivers and more besides, all which point to the drivers being self employed contractors. But the Court has said that is not the way to decide the answer, and instead Courts should just look at the actual facts and decide. 

Things to Consider 

There were five key aspects according to the Court:

The drivers cannot set the price they get paid, and Uber set the “service charge” of 20% it deducted from drivers earnings. 
The contractual terms were totally dictated by Uber.
While a driver could decide when and where to work, as soon at the driver logged on to the app, their choice was constrained. Reject too many ride requests and you get sanctioned.
Uber controlled the service delivery – specifying what cars, what colours, and their preferred route with driver ratings to further control that
Uber restricted communications between driver and passenger except through the app, so that a driver couldn’t claim the customer as their own.

The decision then was not a surprise to many employment lawyers like me, but it continues to impact on smaller businesses like yours.

I’ve seen many small businesses try to take people on a “self employed” basis, in order to avoid tax and avoid having to pay things like holiday, sick pay and maternity leave. A recent tricky example I came across, for instance, was in relation to swimming teachers. The company suggested the teachers were self employed, as outside of the 6 hours of teaching they were able to do what they like, when they like, with whom they like. However, the point is what they are doing for the 6 (or whatever) hours they are with you. 

So if you have self employed people working for your business, and they are not free to come and go as they like, they cannot send a replacement, you control what they do and how they do it (or out constraints on the service delivery), and they cannot decide what to charge, then you may need to consider them as being workers rather than self employed. 

What does it mean in practice?

A worker isn’t an employee, so don’t get all the rights an employee gets, but they are entitled to minimum wage and paid holiday. 

For Uber, it is likely to mean claims from drivers seeking back pay of national minimum wage going back up to 6 years. 

For your business, it’s an opportunity to properly consider whether the people you use are self-employed contractors, workers or employees. 

If you need help with that the do get in touch below.

 

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Business Lawyer and Author.

One of the countries leading litigation lawyers in the UK with 13 years experience and counting.