In a ground-breaking decision, the Employment Tribunal (ET) has ruled that Uber drivers are workers, rather than being self-employed, and thus have the right to be paid the National Minimum Wage (or the National Living Wage where applicable) and to receive holiday pay.

The case was brought by a number of past and present Uber drivers, who argued that they were entitled to protections under the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998.

Uber argued that it merely provided, through its smartphone app, a means for drivers to facilitate running their own businesses and that it did not run a transportation business. Uber also emphasised that drivers were free to decide when they worked and were not obliged to be logged on to the app at any given time or to accept any specific driving assignment, maintaining that this freedom was incompatible with the existence of any form of employment.

The ET dismissed these arguments, commenting that ‘the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common “platform” is to our minds faintly ridiculous’. The ET found that drivers were under a ‘worker’ contract for the time they were in the area where they were allowed to work, were using the app and were able and willing to accept assignments. The documentation governing Uber’s relationship with its drivers contained ‘twisted language’ and ‘brand new terminology’, and went to great efforts to stress that Uber did not provide transportation services. The ET commented that in considering Uber’s arguments, ‘we cannot help but be reminded of Queen Gertrude’s most celebrated line: The lady doth protest too much, methinks’, and found that it was ‘unreal’ to deny that Uber was a transport business.

This ruling could ultimately lead to all of Uber’s 40,000 UK drivers, and those who work on similar terms, being classified as ‘workers’ entitled to certain employment rights. However, this ruling is at ET level, and therefore not binding, and Uber has announced its intention to appeal.

The Government has launched an investigation into the so-called ‘gig economy’, to examine whether on-demand workers have adequate employment rights. HM Revenue & Customs are also launching a specialist unit to investigate companies which avoid giving employment protections to their staff by using agencies or classifying them as self-employed.