Uber has failed to overturn a tribunal ruling that said it must treat its drivers as workers rather than self-employed contractors.
Backed by the GMB union, former Uber drivers James Farrar and Yaseen Aslam won the original Employment Tribunal case against the firm in October 2016, claiming Uber was acting illegally by not giving drivers basic worker rights, such as holiday pay and the minimum wage.
Uber appealed the decision, saying the company acted in the same way as traditional minicab firms. However, the Employment Appeal Tribunal has upheld the original decision.
Nigel Mackay, employment solicitor at law firm Leigh Day, which is representing the drivers, said: "We are very pleased that the EAT has rejected Uber’s appeal.
“We have always believed that the Employment Tribunal’s decision from last October was entirely correct in saying that our GMB member clients were entitled to workers’ right such as the minimum wage and holiday pay.
“We now hope that Uber will accept this decision, rather than seeking pursuing appeals, so that we can swiftly return to the Employment Tribunal on behalf of our GMB member clients, for the tribunal to decide the compensation that they are entitled to.”
Maria Ludkin, GMB legal director, said: “This landmark decision is a yet more vindication of GMB’s campaign to ensure drivers are given the rights they are entitled to – and that the public, drivers and passengers are kept safe.
“GMB is delighted the EAT made the correct decision to uphold the original employment tribunal ruling.
“Uber must now face up to its responsibilities and give its workers the rights to which they are entitled.
“GMB urges the company not to waste everyone’s time and money dragging their lost cause to the Supreme Court.”
The case has wide-ranging implications for the so-called ‘gig economy’ business model, and legal experts are predicting a flood of similar cases.
Enrique Garcia, employment law consultant with the ELAS Group, said: "Uber have lost again and a second judgment has held the drivers to be workers. This ruling reinforces the finding of the Employment Tribunal that these drivers are entitled to paid holidays, rest breaks and the National Minimum Wage or National Living Wage.
"The UK has a complex structure of employees, workers and self-employed. This case shows that when using ‘self-employed’ staff in the workplace it is important to analyse the facts carefully to assess whether the staff are actually employees or workers. Workers have more rights than the self-employed contractors and employees have even more rights than workers. Getting this wrong can prove very costly.
"If Uber appeal further and the Court of Appeal or Supreme Court upholds the decision, we can expect to see a flood of similar claims from gig economy workers. Uber alone has approximately 50,000 drivers in the UK, so the potential fallout is huge. It’s a case that has far reaching implications and will set an important employment law precedent."