Contracts alone won’t save companies like Uber from claims

Latham Parry
February 19, 2021

An employment law specialist at a leading Cheshire law firm has said simply having a contract in place that states a person is self-employed is not enough to protect companies like Uber from claims being brought in employment tribunals, and potentially substantial liabilities which may arise from such claims.

Uber lost its legal battle in the Supreme Court, reaching the same conclusion as earlier courts, that its drivers are classed as workers.

The company could now be liable to pay compensation of tens of millions of pounds for failures to pay the national minimum wage or to provide paid annual leave and for whistleblowing detriment. The company’s workers could claim up to two years’ back pay for minimum wages (or £25,000, whichever is higher) in the Employment Tribunal, or up to six years’ back pay in the County Court.

Latham Parry, employment law specialist at Watsons Solicitors in Warrington says the Court confirmed and clarified the correct test for determination of ‘worker’ status under relevant legislation.

Latham said: “This highlights the importance of looking at the status of the people that work for you: are they workers, in which case they will enjoy various rights afforded to workers such as those being pursued by the Uber workers (or are they even employees, such that they would benefit from far more rights under employment law?)  Or are they truly self-employed independent contractors, in which case they don’t have any of those rights?

“As the Uber judgment makes clear, it’s not a case of just reviewing the contract between the parties to see what that states. Any such written agreement should not be the starting point. The courts will have regard to various factors which are relevant to analysis of the statutory interpretation of ‘worker’.

“The Court focussed on the statutory interpretation, the purposes of which was ‘to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position in relation to a person or organisation who exercises control over their work.’

“Having written contracts is one thing and that can be very helpful, but companies will need to carefully consider the working arrangements and the reality of the relationship to properly assess whether that gives rise to a worker or even an employee status.”

The implications of this decision will be very costly for Uber; it is estimated that Uber engaged around 40,000 drivers at the time of the initial Employment Tribunal decision and some commentators have estimated that the Supreme Court ruling could cost Uber around £100m.

And while each case should be judged on its own facts, this decision could lead to an influx of similar claims from those working in the ‘gig economy.’

Latham continued: “Now is certainly a good time for companies to review their business models, particularly the working arrangements with anyone they engage or contract with to carry out work, and make changes if necessary.”

Watsons Solicitors, which has been established for more than 60 years, specialises in family law, employment law, wills and probate, personal injury and conveyancing.

The team of experienced solicitors each hold various accreditations and memberships of professional bodies relevant to their expertise, while the firm’s partners oversee all areas of work.

Contact Us

If you are interested or require any information on any of our services then please get in touch for an appointment on:

 01925 571 212
Mon-Fri: 9am - 5pm

Latest News

Warrington law firm secures prestigious industry accreditation

Watsons Solicitors is determined to continue delivering excellency after earning the Wills and Inheritance Quality Scheme (WIQS) accreditation. Issued by the Law Society, the esteemed title signifies best practice for providing wills and estate administration advice and evaluates staff expertise, communication skills, and standardised processes. Employees must complete online training provided by the Law Society […]

Watsons family department continues to grow with paralegal recruit

Megan Bentley is the latest fresh face to join Watsons Solicitors’ family law department as she seeks to advance her career. Since starting her role as a paralegal in February, the Skelmersdale-native has been working closely alongside the team drafting orders and C2 applications, while also managing legal aid applications. The 19-year-old brings with her […]

Cheshire law firm continues championing community health and wellbeing

“We can prove with numbers the impact Watsons Solicitors has had but it’s the long-lasting connections, smiles, and laughter that’s difficult to quantify.” This is just some of the overwhelmingly positive feedback from Warrington Wolves Community Foundation CEO Neil Kelly following support from Watsons for its health and wellbeing community programmes. Alongside the charity, the […]

Timing is everything when it comes to January’s divorce month title

A Cheshire-based family law solicitor believes that January being dubbed ‘divorce month’ is primarily down to the strains of domestic life. Danny Hudson, partner and a member of the family department at Watsons Solicitors, says his team sees an increase in couples filing for separation at the start of each year. However, he’s acutely aware […]

Watsons Solicitors

Watsons Solicitors is a trading name of Watsons Solicitors Warrington LLP a Limited Liability Partnership registered in England and Wales registered number OC386012 whose registered office is 13 Bold Street, Warrington, WA1 1DJ.

Watsons Solicitors Warrington LLP is authorised and regulated by the Solicitors Regulation Authority number 598547.

Website managed by Outwrite PR, an online reputation management agency
envelope-oclock-ophonefax linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram