Travlaw update on worker status and its relevance to the Travel Industry

Travlaw update on worker status and the impact of a recent landmark Supreme Court decision which is relevant to the Travel Industry.

In a change from our usual updates on all things Covid related impacting employers, this update focuses on worker status, which was put back in the spotlight as a result of last week’s highly anticipated Supreme Court decision in the Uber v Aslam case.

Uber had failed at earlier attempts in the tribunals and the Court of Appeal to argue that their drivers were independent contractors, because Uber was acting simply as agent between its drivers and riders and this was also reflected in contractual documentation. The Supreme Court’s decision agreed with previous decisions, in that Uber drivers were “workers” and therefore should benefit from certain statutory rights; for example holidays and minimum wage.

In reaching its decision, the Supreme Court said that in reality you have to look beyond a paper exercise and consider whether the individuals deserve the protection of the law. In this particular case, the Supreme Court were persuaded by five key aspects from the previous judgement of the Employment Appeal Tribunal which go to the essence of the issues, namely “subordination, dependency and control”:

  1. Uber had control – they took active steps to limit the ability for riders and drivers to form any sort of relationship.
  2. In terms of how the drivers delivered their services, Uber had considerable control through its policies on treatment of drivers with lower customer ratings.
  3. Uber dictated the prices of trips and thus, a drivers earnings for each trip.
  4. Unlike genuine independent contractors who can choose to turn down work, here the drivers did not have true freedom because, if they rejected too many rides, they were penalised for example with app time outs or restricting a drivers ability to seek rides.
  5. Finally, Uber’s contractual terms were rigid and drivers had no option; they had to be accepted by both riders and users. The Supreme Court stated that consideration behind contractual documentation must be given to establish the substance of the relationship and to protect positions of subordination, like the Uber drivers here.

This case is of relevance to the travel industry, given the use of various contracting arrangements with staff. It is important to establish exactly what it is envisaged the relationship will be with whoever you are contracting with, and whether that will practically play out to be the reality. The consequences of getting it wrong not only means that certain employment rights could be conferred, but there also may well be tax implications.

Ultimately, each situation will turn on its own particular facts, as it did in the Uber case. What this landmark judgement does is say that the law is the starting point in determining status and not the contract! As a result of this judgment, the tests have in effect now become a common law precedent, in advance of the Taylor review which was supposed to address the issue of worker status with a view to making changes to legislation.

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