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Uber court case could dramatically affect your next contract

Uber drivers have taken the online transportation network company to court, arguing that they should be recognised as workers rather than self-employed. The tribunal, which began two weeks ago, could have huge implications for the contracting sector.

Contractors are advised to keep close tabs on the case as it develops, as the outcome may set a precedent for future court cases surrounding employment status and IR35.

“This is the most high-profile court case concerning employment status in recent years,” notes ContractorCalculator CEO Dave Chaplin. “Whatever the outcome, it will undoubtedly provide a model for future tribunal decisions to be based on.”

Blurred lines over employment status

Uber drivers contend that the terms and conditions of their work mean they are not engaged on a self-employed basis and should therefore be entitled to employment benefits such as holiday and sick pay.

This is just one of numerous cases dealing with the blurred lines between workers and the self-employed. Back in April, Uber reached a $100m out of court settlement with drivers in California to avoid a trial that could have seen contractors reclassified as employees.

The topic has received an increasing amount of attention over recent months, with a report by the Recruitment & Employment Confederation (REC) last week calling for the legal status of ‘gig workers’ to be clarified.

Uber outcome to blaze trail for future employment cases

“This case will have a massive impact on future cases surrounding employment status and IR35,” comments Chaplin. “Contractors aren’t concerned with receiving employment benefits, but the basis upon which the decision is made in this tribunal will carry huge weight in future IR35 cases.

“Rather than engaging in disputes with HMRC over subjective and hazy legislation, contractors could potentially point towards the outcome of this case as confirmation of their self-employed status.”

Speaking to Recruiter, principal at Constantine Law John Hayes noted that employment case law elements impacting IR35 are being considered by the tribunal, with ‘supervision, direction or control’ (SDC) and mutuality of obligation highlighted as significant factors.

Contractors urged to pay close attention to contracts

Experts are already encouraging agencies to review the terms and conditions of contracts to make sure that working practices align to create clear a self-employed relationship.

As a contractor you need to be equally as vigilant to ensure you are outside IR35.

Published: Monday, 1 August 2016

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