New Zealand Uber drivers consider court action after landmark UK ruling

Uber drivers in New Zealand are considering court action after a landmark ruling in the UK that classes drivers as employees rather than contractors. Photo / File

Uber drivers in New Zealand are considering court action after a landmark ruling in the UK that classes drivers as employees rather than contractors.

The Central London Employment Tribunal's decision means British Uber drivers will qualify for the minimum wage, paid time off and other perks.

New Zealand Uber Drivers' Association chairman Ben Wilson said drivers here had not taken the company to court so far because of the cost.

But he said a ruling like that in Britain, the home of Common Law, could change their minds.

The organisation would like to explore court action once it had more members and more money, Wilson said.

The UK case centred on whether drivers with the firm, where passengers hail cars using an app, are self-employed or staff.

Uber classes its drivers as self-employed workers, claiming it is a technology company rather than a taxi firm, and says the arrangement allows people to be their own boss and work flexibly.

But drivers argue they are actual employees of the organisation, rather than independent operators running their own businesses.

Today judges sided with the drivers in a ruling that could affect thousands of other workers across Britain at companies with similar models such as food company Deliveroo.

Experts said it would substantially affect the so-called "gig economy", where individuals work for multiple employers day-to-day without having a fixed contract.

The UK's Trades Union Congress general secretary Frances O'Grady said the case had shone a light on conditions at Uber.

"This case has exposed the dark side of so-called 'flexible' labour. For many workers the gig economy is a rigged economy, where bosses can get out of paying the minimum wage and providing basics like paid holidays and rest breaks.

"What is happening at Uber is just the tip of the iceberg. Lots of people are now trapped in insecure jobs, with low pay and no voice at work.

"We need the Government to get tough on sham self-employment... and it must recognise the important role trade unions can play in ending precarious working."

But a spokesman from Uber has since revealed that the company will be appealing the judge's decision.

Two drivers, James Farrar and Yaseen Aslam - supported by the GMB union - had brought legal action against Uber, arguing they should be entitled to holiday pay, a guaranteed minimum wage and breaks.

The Central London Employment Tribunal ruled in favour of the drivers today, and the GMB said the outcome of the case could have "major" implications for more than 30,000 drivers across England and Wales.

The GMB found last year that a member working exclusively for Uber received just £5.03 ($8.56) per hour in August after costs and fees were taken into account, significantly below the national minimum wage of £7.20.

This case has exposed the dark side of so-called 'flexible' labour. For many workers the gig economy is a rigged economy, where bosses can get out of paying the minimum wage and providing basics like paid holidays and rest breaks.

Lawyers for the drivers also argued that Uber acts unlawfully by frequently deducting sums from drivers' pay, often without informing the drivers in advance, including when customers make complaints.

Maria Ludkin, GMB's legal director, said: "This is a monumental victory that will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife.

"Uber drivers and other directed workers do have legal rights at work. This loophole that has allowed unscrupulous employers to avoid employment rights, sick pay and minimum wage for their staff and costing the government millions in lost tax revenue will now be closed.

"Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees. GMB puts employers on notice that we are reviewing similar contracts masquerading as bogus self employment, particularly prevalent in the so-called 'gig economy'.

"This is old-fashioned exploitation under newfangled jargon, but the law will force you to pay GMB members what they are rightfully due."

Nigel Mackay from law firm Leigh Day, which represented the drivers, said after the landmark ruling that the work carried out by these drivers "has allowed Uber to become the multi-billion-dollar global corporation it is".

"We are delighted that the employment tribunal has found in favour of our clients.

"This judgment acknowledges the central contribution that Uber's drivers have made to Uber's success by confirming that its drivers are not self-employed but that they work for Uber as part of the company's business.

"Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is."

Speaking outside the tribunal in central London, he added: "The tribunal has found the claimants, the Uber drivers, are workers for the purposes of the legislation and that they are therefore entitled to minimum wage and holiday pay.

"This is contrary to what Uber was suggesting, which was that they were self-employed. But they should be entitled to basic workers' rights like everybody else."

Uber driver Mr Farrar, from Bordon in Hampshire, had earlier told the tribunal that there was "tremendous pressure" to meet Uber's demands and drivers were forced to choose between safety and doing the job.

He also claimed he had been paid around £5 an hour for some work, far below the minimum wage and what Uber said it paid him.

Farrar dismissed suggestions that Uber is a customer of drivers who run their own businesses, saying it "in no way reflects the reality".

He joined Uber in December 2014, almost a year after being made redundant from a job in the technology industry, and works in London and the Home Counties in the evenings and at nights while pursuing his own interests in the days.

Farrar said: "Working for Uber is my job. I do not run a private hire business - I do not have a service company. I do not advertise 'driving services', I have no-one working for me, I have only one car licensed with TfL for private hire work and I only drive for Uber."

He added: "I understand that Uber is arguing that I run my own business and that Uber is a customer of that business, but this in no way reflects the daily reality of my job."

Farrar said he provides a service for Uber by driving for the company and carrying out work for it, adding: "I am not sure what service Uber provides to me."

He said: "There are times when things have been tight and I have had to work many more hours than perhaps I should have done.

"This time last year I did 91 hours in a week. Is that a choice? I am not sure. I felt I had to do that at that time to survive."

David Reade QC, representing Uber, argued drivers have a choice about their work, there is nothing to force them to work exclusively for Uber, and they are free to work with other private hire operators.

The private tax hire firm said it would be appealing against the judgment.

Jo Bertram, the company's regional general manager, said: "Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.

"The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it."

The ruling is likely to have significant implications for other operators in the industry.

Alex Bearman, a partner at Russell-Cooke solicitors in London, said: "The company now faces having to fund costly benefits for its drivers such as holiday pay, sick pay and pension contributions.

"It is possible that it will look to do so by increasing the percentage of each fare that it keeps as commission."

Aye Limbin Glassey, employment partner at Shakespeare Martineau law firm, said the ruling would "not only impact Uber but a whole number of other industries and businesses which use self-employed workers".

"The very nature of a business like Uber is the flexibility it offers. However, employment practices cannot be left unregulated and rights of workers and employees cannot be ignored unless businesses are willing and ready to face the backlash of legal and reputational repercussions.

"It is stark reality that the application of employment rights will often mean that companies are unable to adopt the agility needed to support its success.

"With consumer convenience the driver of many fast-growing businesses, it is likely that we'll see more businesses of this nature coming to market and using self-employed workers will become a greater concern for companies."

Uber, which has its headquarters in the Netherlands, has previously argued that UK drivers should not be allowed to enforce UK employment rights in UK courts, and should only seek arbitration in the Dutch courts.

- Daily Mail, Newstalk ZB