The gig economy has been the subject of three important court rulings in recent months, giving some much-needed clarity on the legal status of workers in that context. We look at the rulings and the implications for businesses modelled around the self-employed.

Uber[1] In the first case which involved Uber, the fast-growing technology US business that is the scourge of the London cabbie, the Employment Tribunal ruled that Uber drivers were workers and not independent contractors.

Uber passengers use a smartphone app to book and pay for their journeys, and Uber drivers are then paid for those journeys – minus commission. Uber insisted that the drivers were independent self-employed contractors. It argued that it was a technology company and not a transportation business – Uber required drivers to expressly acknowledge this in their contracts. Furthermore, Uber said it simply provided an online platform connecting passengers with drivers.

This was rejected by the ET which found that the contract terminology inferred it was also operating as a transportation business. The ET’s findings also included:

  • the contractual arrangements prohibited drivers from providing their driving services directly to passengers
  • Uber exercised significant control over its drivers, for instance, interviewing and recruiting drivers before they could get onto the app; they had to accept jobs; and were disciplined if they refused a fare three times
  • Uber set the routes and fares, and
  • Drivers had to follow Uber’s process and procedures

Uber drivers were therefore workers and entitled to employment law rights.

Pimlico Plumbers[2] Similarly, in Pimlico, the Court of Appeal decided that a plumber purportedly working as a self-employed independent contractor was a worker, and therefore entitled to basic employment rights.

The plumber worked for the company on the mutual understanding that he was an independent contractor. This contractual agreement stated he was an independent contract. However, clients understood him to be an employee. When he had a heart attack, he was dismissed and claimed unfair dismissal and disability discrimination.

The CA rejected the company’s arguments that the plumber had an unfettered right to substitute someone else to do the work. It also found that there was a contractual minimum number of hours he was required to perform; and the degree of control the company exerted was inconsistent with the clients being clients/customer of the claimant himself. The plumber was also found to be an integral part of the business. He was therefore a worker, not an independent contractor.

Citisprint[3] In Citisprint, the ET ruled that bike couriers who were purportedly engaged as independent contractors can also be workers and entitled to employment rights. The case was brought by a bike courier who carried out jobs for logistics firm Citisprint.

She typically worked four days a week from 9.30am to 6pm, and was in contact with the company controller at the beginning of every day and kept in touch with her mobile phone and a radio. She also logged onto the company’s ‘citytrakker’ system which tracked her whereabouts and helped manage jobs. However, according to the terms of her contract she was a self-employed contractor.

The courier successfully claimed she was a ‘worker’ and entitled to access basic employment rights. She argued that she could not turn down jobs allocated to her; she had to wear a uniform and follow a script when meeting customers; and had to follow company procedure if a parcel was undeliverable. She could not easily provide a substitute (unless to another courier who was already on Citisprint’s books). She was also paid weekly -without having to invoice the company.

The ET again found in the claimant’s favour.

What do these rulings mean?
The gig economy has become big business, but companies need to understand they cannot behind the independent contractor/self-employed umbrella to deny basic employment rights from their workers. If the facts show that the relationship between company and the individual is that of a worker, these rulings show that the court will most likely rule in the worker’s favour.

Companies must protect themselves by reviewing the terms of their contractual relationships before relying on the pretext that a worker is in fact self-employed.

[1] Mr Y Aslam, Mr J Farrar and Others v Uber, Case Numbers: 2202551/2015 & others[2] Pimlico Plumbers Ltd & Anor v Smith [2017] EWCA Civ 51[3] Dewhurst v CitySprint UK Ltd ET/2202512/2016