Legitimate Self-Employment: Lessons to learn from the Uber ruling

For the second time this year, high profile employment disputes have hit the headlines.  First the much publicised flamboyant tradesman to the stars, Pimlico Plumbers, was told by an employment tribunal that it’s ‘self-employed’ contractors were, in fact, employees.  And now Uber has lost a similar case, with what looks to be a landmark ruling that it cannot classify its drivers as self-employed.

There are similarities in both cases that go way beyond the fact that both firms attempted to use the notorious case of Ms Quashie, a self-employed Stringfellow stripper, to get them off the hook. 

Unlike Ms Quashie, Uber drivers and workers at Pimlico Plumbers had strict rules about keeping their clothes on.  More pertinently the two Uber drivers who brought the case also had all sorts of other restrictive rules and regulations – and it was these that helped convince the tribunal they were subordinates in an unequal relationship.

Uber’s main difficulty seemed to be that they could not argue against the fact that the drivers were obliged to provide services personally.  The Working Time Regulations say that those who provide personal service fall into the category of ‘worker’.   

While workers are not full-blown employees, neither are they self-employed, and as such they are entitled to holiday pay and other basic employment protections.

Having lost the personal services argument, Uber relied on its incredibly complex contractual arrangements in an attempt to convince the tribunal that the drivers were running businesses on their own account.  The judges, however, were not impressed and were fairly harsh in their appraisal of Uber’s contracts, which they felt bore no reality with the true relationship between the parties. 

Uber also attempted to use the fact that part of its tax set-up involves registration in Holland, hoping this might help them sidestep the jurisdiction of the English courts.  This argument also failed.

Hudson Contract Managing Director Ian Anfield comments:  “We have seen many complicated, convoluted, and often utterly ridiculous contracts over the years.  It never ceases to amaze us that intelligent people from sophisticated companies fall into this trap.

“To be specific to our own industry, we know of construction payroll firms that are ‘Commercial Contractors’ on paper only, along with building businesses that have willingly signed a 28-page fake ‘Framework Agreement’.  And then there are the accountants who supply contracts that are simply impossible to comply with and fall apart when scrutinised by a tribunal or HMRC.

“Legitimate self-employment is at the core of everything we do at Hudson Contract.  It means we always audit the reality of working arrangements, provide relevant, genuine, and simply-written contracts, fully backed-up by accurate payment and taxation methods.  It is also why we have never lost an employment tribunal case.”