Uber drivers scored a massive victory against their bosses last week, by challenging the company’s assertion that they are self-employed. However, the London Central Employment Tribunal were not determining whether Uber drivers were employees or self-employed, but rather whether they were somewhere in the middle; were they in fact “workers” for employment law purposes. And the answer was yes.
Uber now faces mass litigation as drivers are being advised to issue claims. Deliveroo staff are jumping on the band wagon too; they are taking legal steps to unionise and gain worker status. And these are not the only companies that are likely to have claims issued against them. With an ever expanding GIG economy the Uber case is of huge importance.
It also highlights the importance of categorising staff correctly from the outset of any contractual relationship and ensuring contracts are not drafted by lawyers to merely try to avoid claims but are drafted to reflect the reality of the situation.
The distinction between employees, workers and the self-employed is particularly relevant within dentistry. Dentists engaged as associates have traditionally been labelled self-employed, however, the contractual reality is often very different. Practices must now review their contracts and ask themselves what it is they want to achieve from their working relationships. As a practice owner, if you do not want to be liable for employment rights such as sick or holiday pay, now is the time to act. Some simple changes in the way you run your business will make all the difference. As for associates, it is now worth considering your status to see whether you have been missing out on some of the paid benefits that come from being a worker.
Remember; simply because an associate has signed a ‘self-employed’ contract without complaint for a number of years, does not prevent future claims being issued against your practice.
This decision is also likely to have a massive impact on the dental community and in particular the classification of associates, especially with the rise of corporates. Here we look at why.
Decision
On 28th October 2016 the London Central Employment Tribunal sent out its long awaited judgment in the case of Aslam & ors v (1) Uber BV (2) Uber London Limited and (3) Uber Britannia Limited. The Tribunal held that Uber drivers should be considered workers, as opposed to self-employed contractors.
Uber has already confirmed its intentions to appeal the decision, and the case is expected to go all the way to the Supreme Court given the huge ramifications of the decision, and the implications on a number of business models based on a similar ethos to Uber.
Legal Definition of Worker
Firstly, it should be noted that the Uber drivers were only seeking to establish themselves as workers; not employees. As such we are only considering this category here. For detailed guidance on employment status you can read our October 2016 blog here.
Workers lie in between employees and self-employed contractors, gaining some rights afford to employees but not all of them. This table steps out the rights of each.
To determine worker status, the Tribunal will ask:
- Personal service: Did the individual undertake under the contract to personally perform work or services?
- Business undertaking: Was the status of the ‘employer’ under the contract that of a customer of a business undertaking carried on by the individual?
- Mutuality of obligation: was there mutuality of obligation between the individual and the ‘employer’?
The courts have made it clear that ‘the question in every case is…what was the true agreement between the parties.’ It is therefore the reality of the situation that is analysed in line with the above three questions, not just the contractual documents.
Key Findings
- Personal Service. It was not disputed that the drivers undertook to do the work personally. In any event the Tribunal found that the essential bargain between the parties was that, for a reward, the driver makes himself available to carry passengers of Uber to their destinations.
How is this relevant to dentists?
This is similar to a contract between associate and dental practice, in that the associate must make himself available at agreed times, and for a fee, to treat the patients of the practice.
- Business Undertaking. Uber argued that it was not in business as a supplier of transportation services. It was merely a platform which connected passengers to drivers. Uber claimed to be a a customer of the drivers, as drivers paid a fee to use the platform. However, the Tribunal disagreed. It found that Uber offers a range of services, UberX, UberXL, UberEXEC, UberTAXI and UberWAV. Whereas the drivers only offer one of the services. Crucially, Uber marketed itself as offering a range of transport services, not as a platform service. This was for its benefit; not the benefit of the individual drivers. The Tribunal therefore held that Uber is a transportation service and not a customer of the drivers. Interestingly this is a similar argument Uber put forward before the North California District Court, namely that it was a technology company and not a transportation services. This argument was resoundingly rejected by that court too.
How is this relevant to dentists?
Dental practices are not a conduit by which patients access their dentists. Instead they market themselves as the end supplier of a range of services, such as hygienists and therapists or specialists and dentists with specialist interests, whereas not all staff will be providing those services.
- Mutuality of obligation. Once an individual becomes a driver, they have access to the App, which sends passenger requests to available drivers. A driver is not required to turn the App on but when they do there are certain requirements that the driver must adhere to, including the number of cancellations they can make, the number of fares they reject when online and in terms of their ratings. The Tribunal found this meant the drivers were required to work for Uber when online and that Uber had an element of control over the work the drivers carried out.
How is this relevant to dentists?
Dental practices must have associates in place to undertake dental treatment on the patients booked into the surgery. As such the practice requires the dentist to be available during surgery opening hours. This is even more applicable in relation to practices with NHS contracts, where the practice will require associates to complete a minimum number UDAs per annum. Associates also must comply with the practices policies and procedures.
- Reality of the relationship. The contract and agreements between Uber and the Drivers referred to Uber providing platform services to connect customers with drivers. Of this the Tribunal said ‘the notion that Uber in London is a mosaic of 30,000 small business linked by a common ‘platform’ is to our minds faintly ridiculous…Ms Bertram spoke of Uber assisting drivers to ‘grow’ their businesses, but no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel. The Tribunal went on to state how Uber do not supply leads for drivers, as drivers are not free to negotiate a deal with the customer.
How is this relevant to dentists?
Often Dental Practices set the rates for the dental treatment offered and dentists are not free to negotiate those prices. Also dental practices will often promote the services they offer as a whole and the associate is therefore not free to grow their own business. However, if an associate has their own client list, sets their own hours and/or is able to send a locum in their stead without restrictions, then the reality of the relationship is something different.
We feel that the tide is turning against the broad brush approach to defining ‘self-employment’ and the Tribunals and HMRC will be considering how to crack down on employers seeking to avoid their duties. In a nut shell, in order to protect your practice from costly litigation, make sure your contracts reflect the true relationship of the parties and if you are not sure, then seek advice from an expert.
Laura Pearce, Senior Solicitor