- On 20 December 2018
The Court of Appeal has handed down judgment in Uber B.V. and ors -v- Aslam and ors, holding by a majority (Underhill LJ dissenting) that the claimant drivers were ‘limb b workers’. The Court of Appeal has, however, taken the unusual step of also granting leave to appeal to the Supreme Court.
The appeal focused on the conclusion of the employment tribunal that any driver who had the Uber App switched on, was within the territory in which they were licensed to work and was able and willing to accept assignments was, for as long as those conditions were satisfied, working for Uber under a worker contract. The central proposition of Uber’s case was that Uber drivers are performing their services for, and under a contract with, the passengers, rather than for and under a contract with Uber, with Uber acting as intermediary agent for the drivers.
The majority of the Court (Etherton MR and Bean LJ) held that the ET were correct to find that the claimants were limb b workers.
The majority rejected the argument relied on by Uber that the operational matters relied on by the ET for characterising the claimants as limb b workers are entirely consistent with them being simply conditions of the drivers’ licence to use the App and in that way entirely consistent with the written agreements in place between Uber and the drivers and Uber and the passengers. Applying Autoclenz v Belcher the majority held that those agreements did not reflect reality. Uber’s argument was that Uber acted as agent for the drivers to facilitate the contract between the driver and the passenger. The majority held that this could not be the case as the driver did not know the final destination when accepting the job and the passenger provided no consideration for an obligation on the driver to pick up him or her. There was accordingly no contract between the driver and passenger; the contract was between Uber and the driver as found by the ET.
On the question of when the driver is regarded as working for Uber, the majority agreed with the ET that at the latest the driver is working for Uber from the moment when he accepts any trip. In common with the EAT, the majority had more difficulty with whether the driver can be said to be working when in territory with the App switched on but before accepting a trip; however, the majority concluded that the ET was entitled to reach the conclusion it did.
In a forceful dissenting opinion, Underhill LJ disagreed with the majority. Underhill LJ notes that the central issue in the case is the question of for whom and under a contract with whom the drivers perform the services. Underhill LJ also notes that it is perfectly explicit in the contractual documentation that drivers provide their services to the passengers as principals, with Uber’s role being that of intermediary; the drivers signed those agreements and were bound by them, subject to the effect of Autoclenz, whether they read them or not. On the face of it, the claimants clearly agreed that they perform their services for, and under a contract with, the passenger and not for, or under a contract with, Uber. The question was whether the terms of that agreement could be disregarded in accordance with Autoclenz. In Underhill LJ’s view, it is an essential element of Autoclenz that the terms of the written agreement should be inconsistent with the true agreement as established by the tribunal in all the circumstances. There is nothing in Autoclenz which gives the tribunal a free hand to disregard written contractual terms that are consistent with how the parties worked in practice but which it regards as unfairly disadvantageous and which might not have been agreed if the parties had equal bargaining power. Underhill LJ considered the employment and VAT case law concerning mini cab operators and drivers and concluded that the legal position established is that whether the operator is acting as an agent depends on the terms of the contract between operator and driver. Subject to some technological differences, Underhill LJ considered that the arrangements in the mini-cab cases were not fundamentally different to Uber’s platform-based system and that Uber could, in principle, operate on the intermediary model. The law demonstrates that one well-recognised means of operating a private hire business is for the operator to act as a booking agent for a group of self-employed drivers who contract with the passengers as principals.
Underhill LJ considered that the essential proposition which the reasoning in the ET’s judgment was deployed to support is that it is unrealistic to treat Uber drivers as performing their services for, and under a contract with, the passengers rather than for and under a contract with Uber, and that being so, the contractual paperwork could be ignored on Autoclenz principles. Underhill LJ did not consider that any of the points made by the ET supported that proposition. In his view, the relationship argued for by Uber is neither unrealistic nor artificial; it is in accordance with a well-recognised model for relationships in the private hire car business. That being so, Autoclenz gives no warrant for disregarding the terms of the contracts. For those reasons he did not consider that Uber drivers provide services to Uber under a contract with Uber.
Underhill LJ also disagreed with the majority on the issue of when drivers are working for Uber, if they are working for Uber. He considered that if drivers provide services under a contract with Uber at all, they do so only when they have accepted a trip. The fact that drivers could be disconnected from the App for a period if they reject or cancel trips did not imply a positive contractual obligation to accept a minimum number of trips. That view was reinforced by the consideration that Uber drivers are explicitly entitled to be available for other driving work including through other platforms.
The Court of Appeal gave Uber permission to appeal to the Supreme Court.