A ruling by a London employment tribunal that means Uber drivers should be viewed as workers of Uber rather than self-employed means that they may be eligible for auto-enrolment.

In addition, they will also be eligible for the minimum wage and holiday pay.

Commenting on the decision, Hargreaves Lansdown head of retirement policy Tom McPhail said the decision is “great news” but it is going to be a challenge for Uber and employers like them, in deciding what specific pension terms they want to offer their employees.

“They have some latitude on earnings definitions and deferral periods but however they deal with this, it is going to cost them time and money,” he said.

However, law firm Taylor Wessing noted that the decision is likely to be appealed and at this stage does not set a legal precedent. However, it said that it is “potentially very significant as a matter of UK law”.

“Workers status does not give full employee rights to shared or gig economy service providers. However, ‘worker’ status does give individuals the right to 5.6 weeks of paid vacation per year and to the national minimum wage which is currently set at £7.20 per hour for people aged 25 and over. It may also result in a right to pension contributions. The cost to shared or gig economy companies is potentially great,” it explained.

Taylor Wessing explained that the key issues revolve around the control that Uber allegedly has of its drivers in order to ensure quality of service. It was held that Uber controls key information, in particular regarding the passengers’ destination and potentially takes disciplinary action against its drivers who cancel trips, take poor routes or who receive poor ratings from passengers.

The fact that Uber decides on the fare charged is also relevant. It has also found to be an important fact that payment of the fare does not go directly from the passenger to the driver but via Uber.

“For all companies in the shared or gig economy this reinforces the need to give self-employed contractors as much freedom as possible as to how they perform their services so that the company can show that it is simply providing a technology platform for users and service providers,” it explained.

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