This is a really important decision that sets out the considerations for when a Tribunal or Court is able to set aside the written terms of a contract for services/contract of employment that provides the individual with self-employed status, and to determine that the individual in fact is in a worker relationship with the employer.
A worker not only has the right to be paid the NMW and to statutory minimum paid leave and rest periods, they also have protections from detrimental treatment for asserting a statutory right or whistleblowing, and protection from discrimination on the basis of a protected characteristic. Importantly, the protection from being treated detrimentally when an employee is absent from work due to imminent danger in the workplace, or due to the employee taking steps to protect themselves or others from imminent danger in the workplace, found in section 44 of the Employment Rights Act 1996, is proposed soon to be extended to workers by the Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021.
Therefore, it is important that an employer is able to effectively identify those staff who may have entered into self-employed contractor contracts with the employer yet may in fact hold the legal status of worker. It is also important for individuals to better understand their employment status and contractual and statutory employment rights.
Background to the Uber decision
In recent years the Courts have developed case law principles that have enabled Tribunals to approach the interpretation of the written employment contract in a much more purposive way. The written contract of employment is no longer the sole or principal focus of the Tribunal. All of the circumstances of the relationship between the parties is taken into account by the Tribunal when it determines the employment status of the individual, the written contract of employment being just one of the circumstances to consider.
The Supreme Court decision in Autoclenz -v- Belcher [2011] upheld the Tribunal’s decision that the individuals were workers and had been correct to set aside the express wording in the contract of employment that had expressly excluded worker status. The Autoclenz case shows the willingness of the Court to depart from ordinary principles of contract when determining an individual’s employment status under a contract of employment. Another popular example of the Court disregarding the written contract of employment that specified self-employed status, to find the individual was a worker, is Pimlico Plumbers & Another -v- Smith [2018].
Supreme Court decision in Uber – Uber BV & Others v Aslam & Others [2021]
In February 2021, the Supreme Court upheld the Tribunal, the Employment Appeal Tribunal and the Court of Appeal decisions, that Uber drivers were workers of Uber who was the employer, and the drivers were not self-employed contractors as specified in the written agreement between Uber and the drivers. Uber’s final appeal was dismissed in a unanimous judgment of the Supreme Court.
As mentioned above, this is a really important decision for employment status, which reinforces the principles in Autoclenz and Pimlico Plumbers, and goes a little bit further.
The Supreme Court in Uber articulated the principle that when a Tribunal determines an individual’s employment status and interprets a written contract of employment, the Tribunal is required to apply the statutory tests for worker status and worker rights first, and should determine that any written term of the contract of employment or contract for services that purports to exclude worker status or worker rights is unenforceable and void if – after an assessment by the Tribunal of all of the circumstances of the relationship between the parties – the statutory tests for worker status are in existence. In other words, the statutory tests for worker status and the statutory protections that a worker is afforded cannot be excluded by the express written terms of any agreement between the parties, such as in a contact of employment.
The Supreme Court determined that when deciding an individual’s employment status, the Tribunal must look at the true agreement and stressed the importance of taking into account all considerations, such as how the role is performed in practice. The Court recognised the Uber drivers were in a category of worker that were subordinate to, and in a relationship of dependency on, the employer, so that the statutory protections for workers were designed to apply and should apply despite the written contract. The level of control exerted over the individual by the employer, and the mutuality of obligation between the parties, were also underlined as being relevant factors in determining worker status: these factors are also relevant when determining employee status.
Hanne & Co Employment Team
Hanne & Co’s specialist employment team is able to review contracts of employment/contracts for services to advise employers on the likelihood of there being an employee/worker or self-employed status attaching to the individual staff member. We can also advise on the potential liability for statutory minimum paid leave entitlements and notice period rights and payments. Finally, we can assist if the employer faces any claims for whistleblowing detriments or discrimination made by an individual relying on alleged worker status.
If you are an employee, we can advise you on your likely employment status and assist you in asserting those rights to your employer, and to seek retrospective payments for any unpaid amounts of notice period pay and payment in respect of accrued paid leave.
