A recent tribunal ruling has shed an intriguing light upon the concept of the so-called “gig economy”. In the recent decision, Uber drivers are classified under law as workers, with the same rights as those under traditional contractual employment. In practice, this would mean that they are entitled to annual leave and the minimum wage, and to rest breaks under the Working Time Directive regulations. This has been viewed by many as a benchmark for the way that the increasing numbers of freelance or casual workers are likely to be treated under employment law in the future.

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This high-profile class action lawsuit drew attention to the rift in the gig economy. Uber regarded its drivers as self-employed freelancers. They saw themselves as workers who should enjoy the same benefits as salaried employees. The decision was finalised at the end of October, but the case was actually heard back in July. Employment law practitioners, legal experts, business owners and freelance workers across the country have been eagerly awaiting the result, which will prove one of the most important rulings to be made regarding the status of gig economy workers in years to come.

For many decades, long before the idea of a gig economy surfaced, the courts have been dealing with cases aiming to clarify whether there should be a distinction in law between self-employed workers and contractual employees. The debate over what comprises self-employment and what constitutes traditional salaried employment is nothing new, of course. Many of these debates hark back to the early industrial revolution with ribbon weavers and other cottage industry workers, who were in fact totally dependent upon one large employer.

Uber advertises itself as a platform which links independent drivers with customers who want to hire a private car. It employs 30,000 drivers in London alone, and is now a multinational company with hubs across the globe. Like many gig economy pioneers, Uber uses a smartphone app to connect providers with customers. The carrot it dangles for drivers is flexibility, with the slogan “work for yourself, drive when you want, make the money you need”. However, in practice, the workers have argued that they have to work very long hours with Uber to make ends meet. They have found that in reality it is difficult to turn work down, and that Uber is aware that its drivers are dependent on them, in a similar way to a salaried employee might be.

Lawyers from Leigh Day, who represented the drivers, have since commented that Uber has built its global reputation on the extreme hard work of its dedicated drivers, and as such, it has no right to deny them basic employment rights. Maria Ludkin, legal director at the GMB union has used the term “bogus self-employment” to describe the status of many gig economy workers. She has urged freelancers who are being directed by an employer who refuses to recognise their basic rights to unionise and fight for equal status and the benefits that other workers enjoy.

The impact on businesses is likely to be huge, affecting similar companies like Deliveroo, who has already tried to introduce a contractual clause prohibiting legal challenges to employment status. It is highly likely that Uber will appeal the decision, since it is so detrimental to its business model, and because the decision will be so far reaching that the implications for the gig economy could be dramatic.

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