Hospitality and leisure businesses rely heavily on flexible workers to cover fluctuations in demand. They may be employees, agency workers or self employed contractors. The big issue is whether these staff are self employed or workers, as this will determine their entitlement to a number of employment rights.
There are various tests used to determine worker status and there is often no clear-cut answer. It is often a case of examining the particular facts in each case. This has been illustrated by the ongoing case brought by Uber taxi drivers, who contend they are workers and therefore entitled to rights such as minimum pay rates.
Uber have claimed the business is merely a platform which brings together many small business owners (ie the drivers) and facilitates the opportunity to gain work. Drivers are able to choose whether or not to accept work, by turning on the app when they are in their designated territory
The Employment Tribunal decided it needed to look beyond the written terms of the arrangement to the reality of the situation. As a result, the Tribunal decided that the drivers were workers.
There has now been a challenge by Uber on the status of their drivers. The Employment Appeal Tribunal has agreed with the original decision that Uber drivers are not in business on their own account. Instead, when they turn on the app they are expected to accept at least 80% of trip requests, which is indicative of a worker relationship.
Uber is likely to appeal again and may seek to have the issue heard by the Supreme Court at the same time as the Pimlico Plumbers case. In that case the High Court held that a plumber was a “worker” as a result of the fact that he was obliged to supply his services personally and there was no express right to provide a substitute.
With advances in technology, worker agreements are changing from the more traditional employer/employee relationship and the law in this area is confused. It is hoped that a Supreme Court decision may bring some clarity, as these decisions clearly have a major financial impact for Uber and other businesses in the so-called gig economy.
In the meantime, as workers, the Uber drivers will be entitled to holiday pay, rest breaks and the National Minimum Wage.
Determining employment status
For further details on determining employment status and the implications arising for you as an employer, read more in our article: A flexible workforce – knowing where you stand over employee status
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.