Uber ruling may not solve gig worker pensions issue

Uber ruling may not solve gig worker pensions issue
Credit: Jason Alden/Bloomberg

The Supreme Court may have opened the door to workplace pension schemes for gig workers by ruling that Uber drivers were workers - but the architect of auto-enrolment has warned the issue may not yet be resolved.

In a judgement handed down today (February 19) the Supreme Court unanimously dismissed an appeal by Uber and said the claimant drivers were rightly found to be ‘workers’.

The Supreme Court disagreed with Uber’s argument the drivers were independent contractors working under contracts made with customers.

The judgement could have wider implications for workplace pensions, with many expecting Uber drivers to now become eligible for auto-enrolment.

All employers must provide a workplace pension scheme and automatically enroll workers and make contributions to their pension, subject to criteria.

But according to Sir Steve Webb, who - as pensions minister until 2015 - was the architect of auto-enrolment, the Supreme Court’s judgement did not automatically mean Uber drivers come within the scope of auto-enrolment.

Webb, who is now a partner at consultants LCP, said: “It is good news for Uber drivers that they should now qualify for the national minimum wage and other employment rights.

“But this does not automatically mean they come within the scope of automatic enrolment into workplace pensions. The law around automatic enrolment uses the definition of an ‘eligible jobholder’ which may be subtly different from a ‘worker’.

“It is possible that further court cases will be needed before it is clear whether Uber drivers can also join those with a right to a workplace pension.”

Kate Smith, head of pensions at Aegon, commented: “Today’s Supreme Court judgement that Uber drivers are ‘workers’ rather than self-employed could have ripple effects for all gig workers, giving them not only rights to holiday pay, but potentially other workplace benefits such as employer pension contributions.  

“In the UK pension provision is largely delivered through the workplace, and the self-employed, including gig workers, are excluded from the government’s flagship auto-enrolment policy.

“This reclassification is another step towards opening the doors to auto-enrolment for all gig workers, giving them the opportunity to save for retirement, with the important boost of the right to a 3 per cent employer pension contribution.“

Former Uber drivers Yaseen Aslam and James Farrar had brought a claim in the employment tribunal as a test case to establish their employment status.

Aslam and Farrar were found by the employment tribunal to meet the legislative definition of worker. Both the Employment Appeal Tribunal and the Court of Appeal dismissed Uber’s subsequent appeals.

The number of Uber drivers operating in the UK was estimated to be around 40,000 at the time of the tribunal hearing in 2016.

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