⚠️ This is a news story and may not be up to date. You can find the date it was published under the title. Our Tax Guides feature the latest up-to-date tax information and guidance.

What does the Uber judgment really mean?

Published on 16 November 2017

The Employment Appeals Tribunal have recently found some Uber drivers were ‘workers’ rather than ‘self-employed’ for employment law purposes. Although this judgment technically only applies to the workers who took the case and Uber look likely to challenge the judgment in any case (meaning for now, nothing changes for the UK’s 40,000 Uber drivers!) the story has generated a lot of media coverage. But there seems to be a lot of confusion as to what exactly ‘worker’ status means in the commentary that we have seen, so here we try and set the record straight.  


What exactly is ‘worker’ status?

The current employment law framework means a person’s entitlement to employment rights is determined by their employment status. There are three potential statuses to consider – employee, worker and self-employed.

A 'worker' is basically someone provides work or a service as part of someone else’s business. They generally must carry out the work personally, rather than being able to send someone in their place.

Their work arrangements tend to be 'midway' between self-employment and employment. They do not have the ‘master/servant’ relationship that an employee has with their engager but neither are they 100% their own bosses, deciding how much to charge for their work, how much holiday to give themselves etc.

This is why ‘workers’ have a minimum set of employment rights to help protect them. They have fewer rights than employees who have extensive rights, but they have more rights than the self-employed who tend to have very few legal protections.

What are ‘worker’ rights?

Workers are entitled to certain employment rights, including:

  • getting the National Minimum Wage
  • protection against unlawful deductions from wages
  • the statutory minimum level of paid holiday
  • the statutory minimum length of rest breaks
  • to not work more than 48 hours on average per week or to opt out of this right if they choose
  • protection against unlawful discrimination
  • protection for ‘whistleblowing’ – reporting wrongdoing in the workplace
  • to not be treated less favourably if they work part-time

Under s88 Pensions Act 2008, being auto-enrolled into a workplace pension is also a ‘worker’ right however, this is often overlooked – for example it does not appear in the GOV.UK guidance.   

What about sick pay/parental pay?

Even if Uber drivers are 'workers' under employment law, they will not automatically become entitled to Statutory Sick Pay from Uber. This is because currently, most Uber drivers are treated as self-employed for tax purposes and so are paid gross. Not being paid under the Pay As You Earn system means that there is no secondary contributor (someone who is liable to pay Class 1 secondary National Insurance Contributions). Secondary contributors are responsible for administering and part-financing statutory payments under the Social Security Contributions and Benefits Act 1992. If there is no secondary contributor, then it follows that the worker cannot be entitled to Statutory Sick Pay or any other statutory payments for that matter, e.g. Statutory Maternity Pay, etc.

Therefore, entitlement to Statutory Sick Pay would require not only a change in the Uber driver’s employment law status but a change in their tax status as well (more on this below). In the absence of this, Maternity Allowance or Employment and Support Allowance may be available instead from the Department for Work and Pensions (DWP).

What about taxes?

Employment law status is different from tax law status. Tax law only recognises two types of status – employed and self-employed – and ‘workers’ can fall into either category depending on the facts and circumstances. 

As noted above, most Uber drivers are currently treated as self-employed for tax purposes and this will not automatically be impacted by any changes made to their employment law status.

Having said that, HMRC are very likely to be taking an interest in Uber and whether their drivers are being treated as self-employed correctly for tax purposes. HMRC and/or a tax tribunal would have to rule that the drivers are employees for there to be a change to their tax position – and arguably, it would take a bigger ‘swing’ to reclassify a driver from self-employed to employed than from self-employed to worker.


Contact: Meredith McCammond (please use our Contact Us form) or follow us on Twitter: @LITRGNews

Tax guides

Share this page