This article was written for the Practical Law Employment Blog by Nicholas Siddall KC and has been reproduced with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664.
The long running saga of whether Uber drivers are workers has been decided in the Court of Appeal and a split court has granted permission to appeal. This blog analyses the differing approaches in the Court of Appeal and the arguments that are likely to be advanced before the Supreme Court.
The facts
The Uber business model (involving drivers signing up to an App which allows customers to use their services as a taxi) will be well known to readers. The key issue in the ET and EAT was the extent to which the various agreements between drivers and Uber (all of which were carefully drafted to create the impression of an “arms-length” commercial transaction) reflected reality. In the ET it was held that they did not and the EAT upheld this as a permissible decision on the facts.
The judgment of the Court of Appeal
The Court of Appeal split and judges with significant employment experience fell either side of the divide. The majority included Bean LJ, with Underhill LJ in the minority. The two issues were:
- Are Uber drivers “workers” within the meaning of the legislation?
- When are they working? (That is, are they working when the App is switched on or when they accept fares?)
The majority accepted that the drivers were workers and also that the ET was correct in holding that once the App was switched on in the relevant territory a driver was working. They essentially endorsed the reasoning below, stating that the ET had been correct to find that the contractual documents did not reflect reality. The majority endorsed the suggestion that ETs should be “realistic and worldly wise” in assessing such documents. Indeed the majority spoke of “the air of contrivance and artificiality which pervades Uber’s case”. As to the working period they held that, as a driver was required to accept 80% of allocated fares or risk sanction, it was permissible for the ET to find that “drivers waiting for a booking were available to [Uber] and at its disposal”.
Underhill LJ’s essential disagreement with the approach of the majority was whether Autoclenz Ltd v Belcher and others [2011] UKSC 41[CJ(3] allowed the rejection of the written documents. He said:
“There is nothing in the reasoning of the Supreme Court that gives a tribunal a free hand to disregard written contractual terms which are consistent with how the parties worked in practice but which it regards as unfairly disadvantageous (whether because they create a relationship that does not attract employment protection or otherwise) and which might not have been agreed if the parties had been in an equal bargaining position.” (Paragraph 120.)
Underhill LJ was also far more forgiving of Uber’s written documents stating “[they] do indeed show some egregiously ugly pieces of corporate-speak, tendentious definitions and lawyerisms. But, again, the question is whether these various offences against good English actually conceal a different reality.” (Paragraph 137.)
Underhill LJ finally considered that drivers could only be said to be working when they had actually accepted a fare as opposed to signalling their availability so to do by switching on the App.
Arguments on further appeal
It seems likely that great store shall be placed by Uber on the powerful dissenting comments of Underhill LJ. The likely arguments before the Supreme Court appear to be:
- Uber relied on the decision of the Supreme Court in Secret Hotels2 v IRC [2014] UKSC 16 as showing a different approach to the importance of contractual documents compared with Autoclenz. Plainly this is an issue that the Supreme Court shall be asked to address and whether the fact that a tripartite agreement existed involving two commercial parties was a reason not to follow Autoclenz or if Hotels2 can be ignored as not being an employment decision.
- Uber sought to draw an analogy with the decided minicab discrimination cases. Underhill LJ considered that the uniformity of the extended definition of employment in discrimination cases and the definition of worker meant that such analogies were persuasive.
- The importance of the statutory regime as regards the regulation of private hire vehicles, and that fact that it was Uber and not the drivers who held such a licence, to the issue of whether the drivers work for Uber is also likely to be the subject of close consideration.
- That the ET, EAT and Court of Appeal have been seduced into seeking to avoid the drivers being the subject of a bad bargain as a result of a perceived abuse of bargaining power by Uber. Consideration shall need to be given whether this is an issue for protective legislation and not judicial expansionism.
Outcome
The outcome of the appeal is difficult to predict, but some intuitive force may be felt to exist in Underhill LJ’s point that a protective approach towards those in a weaker bargaining position ought not to lead to a ready discounting of otherwise relevant documents. It remains to be seen whether the Supreme Court shall share his concerns in that regard.
