A UK employment tribunal has ruled that Uber drivers should be entitled to holiday pay, paid rest breaks and the national minimum wage.
The American company had argued that its drivers were not employees but self-employed contractors. However, the ruling said "the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our mind faintly ridiculous."
Employment law experts said the outcome of the case could be far-reaching. Although it does not set a legal precedent the result could encourage similar claims in other industries.
Aye Limbin Glassey, employment partner at Shakespeare Martineau, said she expects the ruling to affect a "whole number of other industries and businesses" that use self-employed workers. “It is by no means the end of the issue – continued pressure from trade unions calling for tighter regulations means that the Uber ruling will likely be a catalyst for further scrutiny.
“The very nature of a business like Uber is the flexibility it offers. However, employment practices cannot be left unregulated and the rights of workers and employees cannot be ignored unless businesses are willing and ready to face the backlash of legal and reputational repercussions," she added. "It is stark reality that the application of employment rights will often mean companies are unable to adopt the agility needed to support their success.”
She advised that employers need to keep up-to-date with workers' records. “To identify, assess and avoid risks associated with the use of self-employed individuals in future, all employers need to check that they are keeping robust, up-to-date records for all individuals, and that such records detail information such as regularity of work patterns.”
The GMB union called the result a "monumental victory". Maria Ludkin, GMB legal director, said the legal loophole allowing Uber to claim its staff were self-employed is now closed. “Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees,” she said.
The two drivers who brought the case against the taxi app argued that because their actions were effectively controlled by Uber they are employees rather than self-employed, but that they had no access to basic workers' rights.
Uber said it would appeal against the ruling that it had acted unlawfully.