Uber ruling has 'profound implications' for auto-enrolment

Uber ruling has 'profound implications' for auto-enrolment

Tens of thousands of workers in the UK's "gig economy" may be eligible for workplace pensions, following a ruling that Uber drivers have employment rights, auto-enrolment provider Smart Pension has claimed.

At the end of October an employment tribunal ruled that drivers for the app-based taxi service Uber were not self-employed, and therefore have employment rights.

These rights, Smart Pension noted, could include receiving a minimum wage and paid holiday, and being auto-enrolled in a workplace pension.

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The AE provider said the ruling had implications for all businesses that, like Uber, operate in the so-called "gig economy". 

Such companies include Deliveroo, which uses cyclists to deliver take-away food from top restaurants, and parcel delivery firms such as Hermes, Yodel and UK Mail.

It estimated at least 60,000 workers fall into this category, and were therefore eligible to be auto-enrolled.

Will Wynne, managing director of Smart Pension, said the ruling had "profound implications", particularly for small and micro firms that using regular contractors.

“The Pension Regulator's own guidance advises that despite the fact that the worker is self-employed, the test is that if there is a "personal contract" to perform work, then there may well be a requirement to offer a pension.

“There are already 1.4m small and micro firms that are currently in the process of enrolling their staff in an auto enrolment pension. 

“An extra 60,000 is probably a conservative estimate of the additional workers to be offered employee rights if they are found to have a "personal" or "limb" contract, something highlighted by the Uber ruling, and probably never properly understood by smaller employers.”

Laurence Sanderson, a financial consultant and auto-enrolment specialist with Sterling and Law, agreed that the Uber ruling had "huge ramifications" for businesses using self-employed contractors.

He said there could be "hundreds of thousands" of "pseudo self-employed" contractors who should actually be classified as employees.

"We've asked The Pension Regulator about this, and they've told us if they look and smell like an employee, then they are an employee."

Mr Sanderson said he advises his business clients to take this attitude when deciding whether or not an employee is eligible for auto-enrolment.

A spokesperson for TPR said: "We are considering what impact the ruling may have on automatic enrolment."