Workers or self-employed ruling
On 19 February 2021 the UK Supreme Court handed down its decision in the high profile Uber driver case. In Aslam and others v Uber BV and others Uber drivers were regarded by the company as self-employed but are in fact workers.
In 2016 the UK Employment Tribunal held that the Uber drivers were workers within the definition of s 230(3)(b) of the Employment Rights Act 1996 and thus entitled to the minimum wage and holiday pay.
This meant that Uber drivers were entitled to receive basic worker rights such as the national minimum wage and paid annual leave.
Uber appealed the Employment Tribunal’s decision to the UK Employment Appeal Tribunal. The Appeal Tribunal agreed with the Tribunal and dismissed the appeal. Uber then appealed the Employment Appeal Tribunal’s decision to the UK Court of Appeal. The Court of Appeal dismissed the appeal and confirmed that Uber drivers are workers.
Finally, Uber appealed to the UK Supreme Court. The Supreme Court dismissed the appeal, and held that Uber drivers are workers and are entitled to receive the national minimum wage and paid annual leave.
The position in New Zealand
In New Zealand a contractor is a person in business on their own account. A contractor usually charges a fee for services, whereas an employee is paid a salary or wage.
The NZ Employment Court also considered an Uber driver case; Arachchige v Rasier New Zealand Ltd & Uber BV and reached a different outcome to the UK Supreme Court Uber case. This was due to specific facts of Mr Arachchige’s case. In two subsequent decisions involving a courier driver and a taxi driver (Leota v Parcel Express Limited and Southern Taxis Limited v A Labour Inspector), the NZ Employment Court found that both companies had engaged the workers as contractors when they were in reality employees. The Court held that in determining how to classify whether someone is an employee or contractor is an intensely factual assessment. A key issue is whether the worker serves their own business or some else’s business.
These cases illustrate that the categories and classification of workers is expanding and is sometimes difficult to get right. There is a need for employers to carefully consider the classification of the worker at the time of entering into an agreement or contract.
If you have any concerns about the status of your workers then please contact our specialist Employment Law Team.