Carolyn Brown

Written by:

Carolyn Brown

Partner, Head of Client Legal Services

Uber difficult is a statutory employment test increasingly likely

  • March 2021
  • 3 minutes

In the space of two days in February, two key Judgments on employment matters were issued. The first was from the Supreme Court (SC) in Uber BV and Others v Aslam and Others [2021] UKSC 5 (Uber), on the interpretation of the statutory definition of worker status. The SC decided that Uber drivers are workers entitled to the statutory employment rights of holiday leave and the national minimum wage. The Uber claimants have endured five years in the courts to achieve finality, but with the quantum of their claim yet to be decided. 

The other judgment is from the Upper Tribunal (UT) in HMRC v Atholl House Productions Limited [2021] UKUT 37 (TCC) on taxpayer status under the IR35 intermediaries tax legislation. This case addressed the crucial question as to whether a worker would be regarded for income tax and National Insurance contributions (NICs) purposes as an employee or office holder of the engager. The UT allowed the appeal and decided that the presenter, Kaye Adams, was not an employee or office holder of the BBC, but instead that she was in business on her own account. 

Central to each case was written contractual documentation which did not reflect the reality of the arrangements between the participants. In each case, the parties’ written contract terms were sidestepped by the court - by the UT necessarily, since it was determining a hypothetical contract, but also by the SC since statutory, not contractual, interpretation was required because it was construing the employment legal statutory definition of ‘worker’. The Uber case also demonstrates an important point in the employment rights arena, that the courts will decide cases on working status with the purpose of employment rights protection very much to the fore, particularly where there is inequality in the bargaining power between the parties to the working arrangement.  

None of this gives businesses the clarity they need on the working status of their people, or transparency for workers. It remains an after-the-event process, dependent on the application of the multifactorial tests of mutual obligation, control and being in business on one’s own account to statutory terminology. This is unsatisfactory to all concerned: clarity is required. 

The stakes are high where incorrect decisions are made. National minimum wage, holiday pay, pension, tax and NICs may all be affected, not to mention interest and penalties. With many more assessments of status likely to take place after the new off-payroll working administrative rules for the private sector come into force from April 2021, it is not in the Government’s interest to allow this manifest uncertainty to continue. The Chancellor had the opportunity to address this in the Budget on 3 March by proposing a statutory employment test and did not do so. But is now the time for a complete rewrite and an alignment of the employment, legal and tax treatment of people in work? We think so. But having been promised an Employment Bill in December 2019, we’re not holding our breath. 

 
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