Buckle up if you operate in the gig economy. Today’s Supreme Court decision is expected to fundamentally re-order the entire industry.
Uber has lost its case in the highest court in the country, appealing against three earlier decisions that its drivers were workers and not self-employed.
Following the decisions in the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal, the Supreme Court decision holds that the manner in which Uber drivers provided their services to Uber London (logging into the Uber app to accept a job) meant they were workers and not self-employed ‘partners’ as argued by Uber.
The impact of the judgment for the drivers is that it is now confirmed they are deserving of workers’ rights including holiday pay and entitlement to be paid at least the National Minimum Wage. They will be entitled to receive compensation for unpaid wages. It may also be the case that back payments will be due to HMRC if pay was not taxed appropriately and through the PAYE system.
This is the leading gig economy case and will have repercussions for many businesses large and small and across a wide span of industry sectors, confirming the work status of potentially hundreds of thousands of people in the UK.
It is a timely reminder of the importance to businesses of ensuring their staff are properly classified and paid and taxed accordingly.
Many will already be aware that the legislative reforms of the off payroll working rules (IR35) are due to take effect on 6 April 2021, these will also place further obligations on employers to ensure that they are paying and taxing staff correctly.
We can assist businesses to audit their workforce to ensure that staff are appropriately classified and paid and taxed accordingly.
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