UK Supreme Court Says Uber Drivers Are Not Self-Employed

Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP February 22, 2021
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London business district and street scene

​Uber drivers in the United Kingdom are entitled to worker benefits, such as minimum wage and holiday pay, according to the U.K.'s highest court.

Uber had argued that app-based drivers are self-employed and therefore not entitled to such benefits, but the U.K. Supreme Court disagreed. The court rejected the gig-economy company's argument that it serves as an intermediary party between drivers and passengers.

We've gathered articles on the news from SHRM Online and other trusted media outlets.

Unanimous Decision

Gig-economy companies, such as Uber, that classify drivers as self-employed independent contractors, say their business model gives drivers the flexibility to choose when and where they work. Critics, however, say the gig-economy business model denies drivers job protections and benefits that are provided in traditional employment relationships. Drivers in the U.K. sued, claiming they were entitled to such benefits. Ultimately, the U.K. Supreme Court unanimously ruled that Uber behaved more like an employer than a technology platform that connected drivers with passengers. Uber set rates and routes, assigned rides, and disciplined drivers based on a rating system, the court reasoned.

(The New York Times)

Uber Says Changes Were Made

An Uber spokesperson said the court's decision applies to a small number of drivers who used the company's app in 2016. "Since then we have made some significant changes to our business, guided by drivers every step of the way," said Jamie Heywood, Uber's regional general manager for Northern and Eastern Europe. "These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury. We are committed to doing more and will now consult with every active driver across the U.K. to understand the changes they want to see."

(BBC News)

Case May Pave Way for Other Claims

The U.K. Supreme Court rejected Uber's argument that drivers are working only when they are transporting passengers and instead ruled that drivers are working from the time they turn on the app. The court sent the case back to the employment tribunal, which could order Uber to compensate 20 claimants. The decision also could apply to thousands more drivers who have taken legal action against Uber and could impact how the company does business. The ruling also could set a precedent for other gig-economy workers and companies.

(CNN Business)

U.S. Independent-Contractor Rule in Flux

On President Joe Biden's first day in office, the White House asked all federal agencies to freeze proposed regulations and those with pending effective dates so that new leaders have the opportunity to review them. In accordance with the directive, the U.S. Department of Labor proposed delaying a final rule issued by the prior administration that would make it easier for businesses to classify workers as independent contractors rather than employees. The DOL may consider repealing the rule and taking the more stringent position that most workers are employees under the Fair Labor Standards Act.

On Feb. 19, the Biden administration also withdrew an opinion letter that said some gig-economy workers who find jobs through smartphone apps—such as drivers for ride-hailing services—are properly classified as independent contractors under federal wage and hour law. The withdrawn opinion letter "addressed the same issue under consideration by the department," the DOL said.

(SHRM Online)

California Gig-Economy Legal Battle Continues

California officials and gig-economy businesses engaged in a lengthy legal dispute over whether app-based drivers are properly classified as independent contractors under the state's strict rules that make most workers employees. In November 2020, however, voters approved Proposition 22, which allows Uber and other app-based platforms to classify drivers as independent contractors if certain conditions are met. The Service Employees International Union and several drivers have sued the state of California, arguing that Proposition 22 is unconstitutional.

(Bloomberg Law)

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