The legal action was started over a year ago by two drivers. They alleged that ‘Uber’ failed to ensure its drivers were paid the minimum wage or that they received the minimum amount of paid holiday.
‘Uber’ has always maintained that its drivers are self-employed contractors rather than permanent employees, meaning they missed out on basic employee benefits.
But the Central London Employment Tribunal disagreed. It said Uber “is in business as a supplier of transportation services”.
The ride-hailing app could now be open to claims from all of its 40,000 drivers in the UK. These drivers are currently not entitled to holiday pay, pensions or other workers’ rights.
Uber has said it would appeal against the ruling.
What does this ruling mean?
The outcome of this case may not only affect ‘Uber’s business model. It could also change the relationship between many firms and their self-employed workers.
Employment experts have said other firms with large self-employed workforces could now also face similar action and scrutiny of their working practices. Unite, the UK’s biggest union, announced it was setting up a new unit to pursue cases of bogus self-employment.
Faced with similar employment tribunal claims these firms may have to change their business models.
“The effect of this judgment is that those kinds of business may owe a lot more to their workers, such as paid holiday and minimum wage, than they had bargained for’. – Tim Goodwin of law firm Winckworth Sherwood.
What should employers do?
In order to protect all employees in the UK, it’s a legal requirement for most businesses with employees to have at least £5 million of Employers Liability Insurance cover in place. This insurance covers the cost of defending or negotiating an employee’s claim that they have suffered bodily injury or disease due to the work they do for you. It can also cover the cost of defending a related criminal prosecution if the accident or disease happened due to a law or regulation had been broken.
Employment Practices Liability Insurance is also essential for any employer. However you will find that it is not always provided as standard. It will cover your company and your employees against defence costs and awards of employment claims arising for example:
- from allegations of sexual harassment or wrongful dismissal by employees
- from allegations of incorrect selection for redundancy
The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation.
You can read more about the differences between Employers Liability Insurance and Employment Practices Liability Insurance here.
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Be sure that you discuss what options you have with an experienced professional, before making any final decisions.
We are regularly arranging Employment Practice and Employers Liability Insurance for Employers. Contact us today for a no obligation quote .
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