To be employed or self-employed, that is the question

Two drivers from well-known online cab service Uber have taken the company to a London Employment Tribunal over claims that the firm is acting unlawfully by not offering holiday and sick pay to its drivers

This important test case hinges on whether the drivers are considered workers or if they are self-employed as Uber claims – two different classifications of employment that are subject to different rules and rights.

Under UK employment law, workers receive similar rights to employees in that they are entitled to holiday pay, are protected from unlawful deductions from their pay, receive minimum national wage and may be entitled to sick pay.

These same rights are not afforded to self-employed contractors, who benefit from a more flexible work arrangement.

Uber maintains that all of its drivers are classified as self-employed and this case may challenge whether they are correct.

The outcome of this case will determine the likelihood of another 17 claims being brought against the company from drivers waiting in the wings. Moreover, it may set a precedent for additional cases to be brought against other employers who use self-employed people within their operations.

Fast food courier service Deliveroo has already reacted to the case by implementing a number of changes to its employment contract to avoid similar cases being brought against them.

According to recent reports, a ‘safety clause’ penned for Deliveroo’s standard contract states: "You further warrant that neither you nor anyone acting on your behalf will present any claim in the Employment Tribunal or any Civil Court in which it is contended that you are either an employee or a worker."

Furthermore, should a Deliveroo contractor challenge the clause, “a staff member will be contractually obliged to pay Deliveroo’s legal fees,” Business Insider has reported.

However, members of the legal profession have argued that this would be unenforceable as the court does not look favourably on clauses that seek to prevent access to justice.

Government outlines online court plans

An important report on the future of the UK’s Civil Court System has recommended a new online court for dealing with all monetary claims up to £25,000.

The proposals are aimed at helping people to use the courts with ‘minimum assistance’ from lawyers, with the help of user-friendly rules.

The review of the Civil Court System by Lord Justice Briggs said the online court would eventually become the compulsory forum for resolving cases within its jurisdiction.

The three-stage process will involve an automated triage system to decide on the merits of a case, arbitration handled by an assigned case officer and a judicial decision if the case cannot be resolved any other way.

In response to criticism from lawyers, Lord Justice Briggs said that law firms would have to meet the challenges posed by the new system and find a way to provide advice at a fixed recoverable cost.

“If they are all substantially implemented, then the essentially high quality of the civil justice service provided by the courts of England and Wales will be greatly extended to a silent community to whom it is currently largely inaccessible, and both restored and protected against the weaknesses and threats which currently affect it,” said Briggs.

The review is designed to coincide with a programme for reform of the courts by HM Court and Tribunals Service, which will involve significant modernisation of system.

Lord Justice Briggs’ review recommends that case officers should be made up from a senior body of court lawyers and other officials who could assist with functions currently carried out by judges, such as paperwork and uncontentious matters.

The case officers would be trained and supervised by judges, and their decisions subject to reconsideration by judges following a request from the parties involved.

The judge criticised claims that the justice offered by the online court would be a form of online dispute resolution.

In response to the report the Lord Chief Justice, Lord Thomas of Cwmgiedd, said: “Lord Justice Briggs has delivered a detailed and innovative final report, which the senior judiciary – working with the government and HM Courts and Tribunal Service – will now consider with care.”

While it is not yet clear whether online courts will go ahead in this format, many solicitors are arguing that having the right advice at hand is key, even with the new system. Its simpler approach will not necessarily negate the need for professional legal advice.

LINK: Civil Courts Structure Review: Final Report

Tighter lending restrictions hit buy-to-let

The future of the buy-to-let market may be affected by new lending restrictions under proposals from the Bank of England, which says it is watching the sector very closely.

According to research by Property Partner, landlords may require a deposit of at least 40 per cent in order to purchase property in certain parts of England, including Cambridge, Worcester and Chichester, if proposals for new lending criteria go ahead.

Proposals from the Bank of England’s Prudential Regulation Authority also include ‘stress tests’, to determine whether investors could afford their mortgage repayments if interest rates increased.

The Property Partner study shows out of 85 towns and cities in the UK, up to 59 could become more ‘inaccessible’ to buy-to-let investors if the new restrictions are imposed.

Earlier this year, the buy-to-let sector was hit hard, after the former Chancellor George Osborne introduced an additional three per cent stamp duty surcharge on purchases of second homes.

Concerned investors with plans to expand their property portfolios are advised to act fast, before any changes to lending criteria can be implemented by the Bank.