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The lawyers who challenged Uber

by Nick Denys
6 March 2017

In October 2016 the Employment Tribunal, in a landmark judgement, decided that 19 Uber drivers should be classified as workers and were entitled to the employment rights associated with this status. Nick Denys talks to Nigel Mackay and Annie Powell, solicitors from Leigh Day who ran the case for the drivers, about the clash between employment law and technology platforms.

Nick Denys (ND): What was your first involvement with the Uber case?

Nigel Mackay (NM): We were approached by an Uber driver who had various complaints about the way he had been treated, in particular by a passenger. He found that he didn't have any recourse and had grievances with the way the system operated.

We started to look, with the GMB trade union, at the way the whole Uber system operated, the status drivers had been given and the contractual arrangements. We soon realised that there was a strong chance that Uber were mislabelling their drivers as self-employed contractors.

ND: Why did the drivers want worker rights?

NM: The reason they brought the claim is that they had an awareness of the rights they were not getting. In particular, pay was a big issue because it was going down and down as Uber were recruiting more and more drivers. Drivers had been brought in with this promise of high earnings but they realised their wages were dropping below national minimum wage.

Uber told drivers they were self-employed and free to run their own business how they wanted, but that didn’t reflect reality. For example, Uber controls the fares drivers can charge and allocates customers to drivers, so they were not able to get customers or charge more. Uber is in complete control of the financial arrangements - including arbitrarily reducing fares, which was effectively a pay cut for drivers.

ND: When did you start to realise that you had a strong argument for Uber drivers being workers?

Annie Powell (AP): In particular it was the way Uber asserted control over the way the drivers operated. For example, Uber dictates the route drivers should take, how much is charged for the journey and refuses to tell drivers the passenger’s destination before they collect the passenger. Uber also operates a star rating appraisal system where if you drop below a certain level you get sacked.

Uber's Twitter feed was really interesting. The way it advertised and engaged with customers - which it did a lot - was by claiming to be transport company where it controlled the quality of the service. Uber would deal with customer complaints referring to 'Uber drivers'. It even had a tag-line that Uber was everyone's private hire driver. All of this undermined Uber's argument that it was just a technology platform and not a provider of transport services.

ND: What about the argument 'If you don't like it, quit and go and work for someone else'?

NM: A lot of the clients we spoke to are private hire drivers by trade. Uber is now dominating this industry, especially in London. A lot of the drivers used to work for mini-cab firms that no longer exist, so they don't have anywhere else to go.

If we believe in employment rights then everyone should have to comply with that. There's a reason we have a minimum set of standards that applies to everyone. There will always be some people who are desperate enough to take a job on any conditions.

ND: One of the interesting words that's been mentioned a number of times is 'control'. How important is that in judging what status someone is?

AP: Control isn't part of the statutory definition of whether someone is a worker. A worker is an individual who has a contract to work personally for the company, provided the company is not a customer or client of a business or profession carried out by that individual.

There is case law that explicitly says it's not necessary to establish control by the company in order to be a worker. But control is one of the factors you look at to see whether someone is running their own business and whether the company is a customer of that business.

Uber sets the route drivers should take and if the driver doesn't take the route on the app and then a customer complains about the route - and the driver can't justify it - then Uber may deduct money from the driver's pay.

Drivers are not allowed to ask customers for their contact details. Uber specifies the types of car the drivers can use. These factors pointed to drivers working for Uber rather than running their own businesses.

ND: The Uberisation of business models is expanding. How much of a challenge is that to employment law and workers?

NM: Uber sees itself as a modern global phenomenon that's different from standard companies. Employment law is still the same, the difference is that it's now much easier for technology platforms to recruit thousands of people very quickly.

Many of these technology companies are start-ups by entrepreneurs who don't have a lot of money at the beginning. The successful ones start employing lots of people very quickly and they don't like regulations because they're solely focused on growing as big as possible, as fast as possible. Regulation is boring, it gets in the way and it's expensive.

AP: Technology businesses often say they are a platform. For example, Uber said it was a platform that just connects drivers to each passenger, so there was no contract to work between each driver and Uber. But that clearly wasn't true; the drivers work for Uber.

To judge a person’s employment status you need to look at what the relationship is in reality. Does that individual work for the company, or is it purely a matching service - like Ebay?

NM: Ensuring that people have workers’ rights should not be a barrier to setting up your business because there are ways of paying people properly while still operating a profitable business.

ND: How do you think the clarity around employment status can be improved?

NM: I think it’s quite difficult to simplify the question of status because it's about looking at different factors.

For me, the key issue is about enforcement of rights. You have to look at access to justice and employment tribunal fees, and whether for this type of claim you could waive the fees.

You need to see if there are ways to stop companies being comfortable taking the risk of not giving employees the rights they're entitled to. Maybe there needs to be a harsher punishment system. At the moment all companies need to do is make up what they should have already paid the worker in the first place, so there are no real penalties for denying workers their rights.

AP: Even if half the workforce brings a claim, which is a high number of claimants, it still might be worthwhile taking the risk as they'll only have to pay half of what they owe.

There needs to be a stronger disincentive for breaking the law. For example, failing to pay holiday pay should attract criminal liability in the same way as failing to pay the minimum wage.