Will Uber's disruptive influence be quelled by employment law?

Gareth Brahams of BDBF LLP considers whether Uber’s business model could withstand the employment law challenge for driver’s rights to holiday pay and disciplinary and grievance procedures.

The elephant in the room 

The legal question is are Uber drivers really business partners, or are they workers or employees? It is important because the law confers lots of rights on employees (e.g. unfair dismissal and the right to redundancy payments); some on workers which employees also get (like minimum wage, paid holiday etc.) but almost none on arms length business partners. In many cases we instinctively know what someone is but when pushed it is hard to pin down exactly why. Even the judges have resorted to saying that an employee is like an elephant - you know one when you see one. But when the disruptive power of technology changes the landscape and makes it all grey – can you still see the elephant? 

Technology as a disruptor 

It is easy to see how technology could be used to create some pretty asymmetrical “business partnerships” so maybe the GMB trade union has a point. The drivers on the ground aren’t really running their own businesses, they are working for Uber on a commission basis. Just like in the days of the mill and the factory, they are beholden to their bosses. Technology disrupts the form not the substance.

The imbalance of power

Employment law is there to redress the balance of power between the over-mighty master and the too easily exploited servant; technology might alter the way the imbalance of bargaining power manifests itself but not the fact of it. It reminds me of when e-signatures first came out and people asked how the law would deal with the departure from marking your agreement by the centuries old use of pen and ink. The answer was “very easily”. The law adapts to disruption so fast and effectively because despite what non-lawyers assume, the judges are always so much more interested in substance than form. 

Gareth Brahams is Managing Partner of employment law firm BDBF LLP