Gordons Legal Employment Update – Friday 24 November 2017

Employment Appeal Tribunal confirms Uber drivers are ‘workers’

In Uber BV and Others v Aslam and Others, a case likely to have repercussions for the wider ‘gig economy’, the Employment Appeal Tribunal (EAT) has dismissed taxi operator company Uber’s appeal against the Employment Tribunal’s finding that its drivers are ‘workers’.

First, it is worth a quick re-cap of the history of this case prior to the EAT decision:

• A number of Uber drivers had brought employment tribunal claims against Uber for failing to pay the National Minimum Wage and provide paid annual leave, entitlements available to ‘workers’ but not those classed as ‘self-employed’.  In seeking to persuade the Tribunal that Uber drivers were self-employed, Uber presented itself merely as a smartphone app provider through which customers could order a taxi and pay the fare, rather than a provider of the taxi service itself. Uber further argued that the claim that its drivers were self-employed was supported by the wording of the contractual documentation between Uber, the driver and the customer.
• The Tribunal disagreed with Uber’s view, finding that the reality of the working arrangements rendered Uber drivers ‘workers’.  In an additional blow to Uber, the Tribunal found that drivers should be treated as ‘working’ not just when they were driving but when they had logged onto the Uber app and were willing to pick up customers, essentially a finding that Uber had been paying drivers below the National Minimum Wage.

In dismissing Uber’s appeal against the finding that its drivers were ‘workers’, the EAT noted that it was required to assess the true nature of the relationship between Uber and its drivers rather than taking at face value the Uber designation of its drivers as ‘self-employed’ in their contracts.  In confirming the Employment Tribunal’s view of when Uber drivers could be considered to be ‘working’ for National Minimum Wage purposes, the EAT noted that although Uber drivers could in theory refuse work when they were logged onto the app, this could result in their access to the app being blocked and therefore being unable to work.

Comment:      The EAT Judgment shows that even where workers are described and treated as ‘self-employed’, an employment tribunal is able disregard those descriptions in order to assess the true relationship between an employer and its workers.

According to Sky News, Uber has appealed directly to the Supreme Court against the EAT decision, meaning that this issue remains unresolved.  It is not known at the time of writing whether the case will be heard at the same time as the Pimlico Plumbers case due to be heard in early 2018.

Weekly rest breaks – clarification from the European Court of Justice

In the recent case of Maio Marques da Rosa v Varzim Sol the European Court of Justice (CJEU) has clarified how a worker’s entitlement to a rest period of 24 hours each week (as required by the European Working Time Directive) should be interpreted.  Portuguese casino worker, Mr Maio Marques da Rosa, claimed that his employer Varzim Sol had not complied with the Directive when it failed to give him a 24 hour rest period at the conclusion of 6 consecutive working days.

The Directive states that:

“[for] each seven-day period, every worker is entitled to a minimum uninterrupted rest period of 24 hours”.

The Court found for Varzim Sol, stating that the employer can determine when in each 7 day period the worker’s 24 hour rest period is to be taken, rather than it having to be taken following 6 consecutive working days.  This means that a worker could be required to work for 12 consecutive days if his working pattern was such that he took his 24 hour rest day on the first day of one 7 day period and a 24 hour rest day on the last day of the following 7 day period.

Comment: The law that implements the Working Time Directive in the UK provides that employers can choose whether to allow workers in each 14 day reference period, either:

• two 24 hour periods of rest; or
• one 48 hour period of rest.

This is important because, applying the CJEU’s Judgment, this would mean that in theory a UK employer could require its workers to work for 24 consecutive days.  Employers should, however, beware of taking this risky approach as it could be subject to legal challenge on the basis that such a working pattern is incompatible with employers’ health and safety obligations to their workers.

If you have any doubt as to whether you are fully compliant with the law governing working time, please contact a member of the Employment team.

Can wrongful constructive dismissal arise from an employee being given a false reason for his dismissal?

In the recent case of Rawlinson v Brightside Group Ltd, it fell to the Employment Appeal Tribunal (EAT) to consider whether an employee could successfully claim for wrongful constructive dismissal in circumstances where he resigned after being given a false reason for his dismissal.

Mr Rawlinson was employed as the Group Legal Counsel for Brightside Group (BG), an insurance broking business, from December 2014.  Soon after his appointment, concerns grew regarding Mr Rawlinson’s performance.  Despite not raising the issue of his performance with him, BG prepared to dismiss Mr Rawlinson, and in May 2015 informed him that he was being given three months’ notice and his dismissal would be confirmed in writing.  However, the false reason given to Mr Rawlinson for his dismissal was that there was to be a restructure and his services would not be required.  Mr Rawlinson considered that such a reason was in breach of BG’s statutory obligations, and resigned in response; it was only after the event that he found out the true reason for his dismissal.  He brought his claim on the basis that he had resigned in response to BG’s fundamental breach of contract, being that of mutual trust and confidence.

In finding for BG, the Employment Tribunal noted that BG was under no obligation to provide any reason for dismissing Mr Rawlinson and, as such, he was not entitled to resign and treat himself as dismissed.  However, the EAT overturned the Employment Tribunal’s decision and allowed Mr Rawlinson’s wrongful constructive dismissal claim.  The primary rationale behind this decision was that BG had a duty not to mislead Mr Rawlinson; once it had elected to provide a reason for the dismissal, it was obliged to be honest.

Comment: This case serves as a warning to employers who may be tempted not to be completely honest when providing reasons for dismissing employees, even when those employees are ineligible to claim ‘normal’ unfair dismissal.  The motives of the employer are not relevant; even if they are seeking to ‘soften the blow’ and save the feelings of those they are dismissing, they have a duty not to mislead.

Employment highlights from the Autumn budget

The Chancellor of the Exchequer presented his 2017 Autumn Budget on 22 November, the key points affecting Employment law being:

Wages

Taking effect from April 2018, the National Minimum Wage/National Living Wage will increase as follows:

• For those aged 25 and over – increase from £7.50 to £7.83
• For those aged 21 to 24 – increase from £7.05 to £7.38
• For those aged 18 to 20 – increase from £5.60 to £5.90
• For those aged 16 and 17 – increase from £4.05 to £4.20
• For apprentices – increase from £3.50 to £3.70

Taxes

From the 2018/19 tax year, the personal allowance and higher rate threshold will increase as follows:

• Personal allowance – increase from £11,500 to £11,850
• Higher rate threshold – increase from £45,000 to £46,350

Employment status

The government will launch a consultation to form part of its response to the July 2017 ‘Taylor Review of Modern Working Practices’, with a view to clarifying the employment status tests for both employment rights and tax purposes.

Comment: If you have any queries or concerns about steps you need to take to comply with these forthcoming changes, please contact a member of the Employment team.

If you require any further information on the above developments then please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.