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In this article, we are going to be looking at employment law, what it is and why it is important. We then later look at the recent Supreme Court decision against Uber and how that shapes employment law going forward.

This article considers employment law, its importance, and what the recent Uber decision at the Supreme Court means.

Put simply, employment law covers anything and everything related to having a job. This includes your rights and duties as an employee, the rights and responsibilities of your employer, ensuring fair processes of recruitment and dismissal, and guaranteeing workplace safety.

Employment Contracts

An employment contract exists as soon as a job offer is accepted. You are then entitled to a written statement of particulars from your employer. This is your ‘go to’ reference point to understand the terms of your employment relating to:

• Salary (how much, when and how it will be paid)

• Working hours

• Holidays

• Staff training requirements

• Sick pay

• Maternity/paternity leave

• Notice periods (the procedures for resigning)

Essentially, employment contracts enable employees and employers alike to understand and adhere to their agreed terms.

Employment Status

That being said, not all employment is the same. While some people work for the same employer for many years (nurses/receptionists/solicitors), others switch employers all the time (agency workers/builders/freelance writers). Some people have no employer at all (company directors/ farmers/barristers).

Employment law makes this distinction. It groups people into three types:

Employees have an employment contract. They enjoy regular work from the same employer and are employed personally to carry out that work.
Workers are employed more casually. They have contracts for services instead of employment contracts. These are agreements to provide services in exchange for payment or reward. Workers are also employed to do the work personally, but the nature of their employment means they have less certainty about receiving work (e.g. Zero-hours contracts).
Self-Employed people are responsible for their own working patterns: choosing how and when to work. They perform services for clients and receive invoices. They can work for various clients and charge different fees.

Employment Protection

Distinguishing between employment types is important because they dictate the level of employment protection. To ensure protection, employment law attaches a combination of statutory duties (rules made by parliament) and common law duties (rules made by the courts) to employment contracts.

The comparison below shows that the level of protection varies depending on employment status. The disparities are significant, and worth considering when making career choices.

Employee rights include:

• Minimum wage

• Workplace pension

• Statutory sick pay

• Statutory maternity leave and pay

• Statutory redundancy pay

• Paid holidays!

• Health and safety at work (including safe colleagues)

• Protection from unlawful discrimination

• Claims for redundancy and unfair dismissal (after 2 years)

Worker rights include:

• Minimum wage

• Paid holidays!

• Payslips

• Health and safety at work (including safe colleagues)

• Reduced protection for pregnancy

• Protection from unlawful discrimination

Self-Employed rights include:

• Health and safety at work

• Protection from unlawful discrimination

England and Wales have a dedicated court called the Employment Tribunal. This is an accessible way for ordinary people to enforce their employment rights.

History tells us that greedy employers put profit above employee welfare. Think of the Victorian exploitation of child chimney sweeps and impoverished factory labourers. Addressing the power imbalance between employee and employer in order to safeguard employees is an important reason behind employment law.

Uber in the Supreme Court

Given that the nature of employment is complex and evolving, sometimes an individual’s employment status is not clear cut. When someone believes they are being denied employment rights because of a false understanding of their employment status, they might initiate legal action. This was the case in Uber BV and Others v Aslam and Others [2021] UKSC 5.

Back in 2016, two Uber drivers argued before the Employment Tribunal that they should be considered workers rather than self-employed. Uber denied this, saying that Uber drivers were independent contractors, and if anything, it was Uber who worked for the drivers.

Classifying Uber drivers as workers would have a major impact. Drivers would be entitled to greater employment protection, such as a minimum wage and paid holiday. Significantly, this could improve the employment status of not only 50,000 UK Uber drivers, but equally enhance the position of 4.7 million people across the gig-economy with similar working arrangements.

Therefore, it was momentous when the Tribunal sided with the drivers by determining they were workers. It had found that their contracts amounted to “an undertaking to do the work or perform the services personally” under s230(b) of the Employment Rights Act 1996.

Uber’s business model was now under significant threat. Uber launched two consecutive appeals to the Employment Appeal Tribunal [2018] and to the Court of Appeal [2019]. Both were unsuccessful.

In 2020, the case came before England’s highest court – the Supreme Court. Then, in February 2021 the Court ruled unanimously in favour of the Uber drivers. It determined that the drivers were ‘workers’ as long as they were logged into the Uber app, remained within their licensed territory, and were ready to work.

The Supreme Court gave five reasons:

1. Uber set the fares for each ride instead of Uber drivers

2. Uber set the terms and conditions for using Uber services

3. Drivers faced penalties for cancelling or refusing rides

4. Uber controlled drivers’ work through a performance rating system

5. Uber tried to prevent drivers from making separate agreements with passengers

All considered, Lord Leggatt deliberated power imbalances. He said that the relationship between Uber and its drivers consisted of “subordination and dependency.” Clearly, this did not chime with self-employment.

It will be interesting to see how gig-economy companies like Deliveroo and Uber Eats react. The Supreme Court’s reasoning will be followed and applied by other courts (creating a precedent). Many individuals with similar working arrangements will consequently want to claim for better employment rights. In all likelihood, companies will try to avoid future claims by tweaking working arrangements altogether.

Time will tell. But if there’s one thing this case represents, it’s equality before the law. It demonstrated that employees of modest origin can, through the courts, take on vast corporate employers… and win. Although equality before the law is an old principle, this case reminds us that it continues to have drastic effects.

By Angus Thomas

Glossary box

Written statement of particulars - This is the employment law term for a statement of what the employment relationship entails, such as employment terms, job description, pay, etc.

Unlawful discrimination - Treating someone differently because of a protected characteristic, such as religion or race (click to see our explainer articles on those topics)

Leducate Explains: Employment – The Uber Decision