Uber seems to be going through the wars at the moment for many reasons, but the first blow came when the courts found that their drivers were employees rather than being self-employed.
Whilst Uber was licking its wounds, Addison Lee (a competitor of Uber) were rubbing their hands- until yesterday when they too received the ruling that their self-employed drivers were in fact employees and should be entitled to employee benefits such as sick and holiday pay.
Self-employed drivers are common place in the transport sector. We have many clients who employ drivers on this basis, but it is important to know the true status of your employees, otherwise you might find yourself running on empty.
As with a lot of things in life, nothing is black and white and each case can be different, but here are some things to consider when thinking about whether or not someone is truly self-employed:
- Do they have a ‘Contract of Employment’ or a ‘Contract for Service’? It’s what it says on the tin, if they have a Contract of Employment, then they are an employee. That is not to say that if you have a Contract for Service that you are in the clear if in practice they are treated like an employee in all but name. It is important that the document governing the relationship is drafted correctly so that the true nature of the relationship is clear;
- Who has the ultimate say? A self-employed person will be able to have control and a say as to how and when the work is carried out;
- Do they work just for you, or do they work for other companies as well? The more people they work for, the more likely it is that they will be seen as truly self-employed;
- Who’s got the risk? If things go wrong, who is responsible for fixing it? You? Do they have to have insurance to indemnify you for any loss suffered as a consequence of their actions? If you have all the risk then they may be an employee;
- Are they able to get someone else to drive on their behalf or delegate work to others? Or are they the only ones who can carry out the work? This one is very important, as an employee is not usually allowed to send some else to do their job for the day if they are not able to make it (despite how good the wig and sunglasses may be) but a self-employed person usually can;
- Do they have to work if you ask them to or can they say no? A self-employed person has the right to turn down work and you are under no obligation to provide them with work;
- Do you provide them with all the equipment that they need in order to carry out the work? Whilst this one is a huge grey area, the more materials and equipment you provide them with, such as a van or uniform, the more likely they are to be seen as an employee;
- Are they free to work the hours that they want to? Most people become self-employed exactly for this reason, so that they are able to control the hours that they work. If you are giving them set times and making them clock in and out – be warned that this level of direction and control may leading to a finding of employment status.
When making a decision, the court will look at what the intention of both parties was. If the relationship was genuinely intended to be one of self-employment by both parties, then they will take this into account. They will also look at what is common in the industry, and as we said earlier, self-employed drivers are very common in the transport industry.
But following the Uber and Addison Lee findings, it is likely that all of the transport sector will soon be under the magnifying glass. The consequences of getting it wrong may be an influx of claims for holiday pay and/or sick pay. So, whether you transport people or frozen food, make sure you know the employment status of your employees, so you can stay on the road.
The above is a guest blog written by Nickie Elenor, Managing Director and Solicitor at Your HR Lawyer.