An Employment Tribunal ruled against the taxi-app firm Uber in what’s being called a landmark case for worker’s rights, the “gig economy” and the concept of self-employment.
The ET – in a verdict which will be appealed by Uber – ruled that Uber drivers were, in fact, employees of the “platform provider” and as such entitled to a number of employment rights in the UK.
Although the case was about employment rights, it will no doubt have an impact from a Tax and National Insurance perspective.
If the drivers are employees, then that will mean PAYE obligations, employer’s NI contributions and no doubt auto-enrolment obligations as well for their employer.
As well as its impact on Uber, there are a few factors here which will be applicable to many industries that are worth bearing in mind.
Substance over form
To quote the ET report, “[Uber’s] general case and the written terms on which they rely do not correspond with the practical reality”
Uber’s representatives’ case in court appears to have been undermined in part by e-mail correspondence and other records of communication between Uber’s “front-line” staff and the drivers.
The court also made reference to the relative bargaining power of the parties – noting that the drivers, many of whom were not first-language English speakers, would likely have struggled to understand “dense legal documents couched in impenetrable prose”.
The standard tests of employment vs self-employment were applied here. They included matters like “on-boarding” of new drivers and whether this was actually recruitment by another name, the enforceability of Uber’s “standards” being a matter of control and other points.
Amongst many points one of particular relevance was invoicing.
Despite ostensibly having invoices from the “driver” to the “rider”, it was clear that in reality, no passenger ever received a follow-up invoice from a taxi driver. Instead, Uber settled all drivers’ “commission” on a weekly basis (taking a percentage of the fare as a “fee” for access to the Uber platform).
The court – quoting, with a lyrical flourish, Milton’s “they also serve who only stand and wait” in precis of their thinking – included as working time those periods where drivers did not have a fare on board but were within their allotted territory and available for hire.
The court ruled out, however, time spent travelling from the driver’s home to that territory as being working time.
What everyone needs to think about
Clearly businesses genuinely using self-employed sub-contractors need to consider a number of different points and many matters form the Uber ET that cannot be covered in this article.
Based on the above, though, we would suggest a few key starting points:
Contracts should reflect reality
If your actual procedures in dealing with sub-contractors significantly differs from your service agreements, that could be a big problem.
Both parties need to understand what they are involved in
There has to be a clear indication from your sub-contractors that they understand your agreements and their status under them.
Be prepared for scrutiny
It could be lethal to a business to have to pay employer’s NI, run PAYE and administer auto-enrolment for workers if it never factored in those costs. As such you need to be very sure that your arrangements are correct and that they stand up to scrutiny. This case, other high-profile cases such as Christianuyi and HMRC’s declared intent to root out “false self-employment” mean that this now a high-risk area.
If you feel you need advice on employment taxes, national insurance or other aspects of legislative compliance, please don’t hesitate to contact us.
 Aslam & Ors v Uber BV & Ors , Paragraph.90
Ibid. para 96
 Ibid, Para. 100