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23 February 2021

Gig Economy: let’s not get carried away by Uber v Aslam

On Friday 19 February, the Supreme Court handed down its decision in Uber v Aslam. It held that the drivers who were bringing claims against Uber were “workers” and therefore entitled to certain statutory rights, including payment of the National Minimum Wage.

To do so, the Supreme Court disregarded the terms of the clear and unambiguous contracts between Uber and the drivers. In a unanimous judgment it held that to treat the contracts as a starting point would undermine the purpose of legislation like the National Minimum Wage Act, which aims to protect workers. Instead, the Court held, it was necessary to look at whether there was a relationship of “subordination and dependency” of the worker and “control” by the employer. On the facts, it was found that Uber exercised significant control over its drivers and that they were therefore workers.

For Uber itself, the implications of the decision are massive. If the case is goes on to be applied generally to all of their drivers, then the increased costs could lead to substantial changes in their business model – and probably a rise in your fare.

But let’s not get too carried away about the wider impact of the case on the gig economy.

There is a hurdle many would-be workers in the gig economy will struggle to get over, and that is the statutory requirement that to be a worker, you must provide “personal service”. This means that it is the worker – and the worker alone – who must do the work provided.

While Uber does require personal service, many gig economy businesses such as DPD and Deliveroo have escaped their drivers and riders being classified as workers on the basis of so-called “unfettered substitution clauses”. Those clauses allow drivers/riders an unlimited right to send someone else (the substitute) to do the work provided. Where such a clause has been found to be genuine, courts and tribunals have consistently held that it means there is no obligation to provide personal service.

Time will tell whether the higher courts agree and it may be the issue of substitution is determined finally by another Supreme Court decision in a few years’ time. But for now, it seems that many gig economy businesses will have an escape hatch.

For further guidance, contact our employment team on enquiries@bpcollins.co.uk or 01753 889995.

Greg Clark

Greg Clark

Tel: 01753 279033

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