ECJ rules Uber IS an employer

Thursday 21 December 2017

Most contractors will have been following Uber's troubles over the past few months, but for those who haven't: the firm has been accused of employing people while it claims it merely provides a service for self-employed drivers.

This has been a hotly-contested issue, as should Uber be found to be an employer, they would then have to pay out for sick pay, holiday pay and a range of other rights employees have. This could have wide-reaching effects across the 'gig economy', and a recent  European Court of Justice (ECJ) ruling could have major effects.

On December 20th, the ECJ made the decision that Uber is a transport company, as far as employing drivers is concerned. The firm claims it is an "information society service", essentially providing a digital platform for self-employed drivers to use. However, the ECJ did not agree with this.

In a statement, Uber said: "This ruling will not change things in most EU countries where we already operate under transportation law. It is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button."

So, what does this mean if you're a contractor in the UK? If you work as part of the gig economy, it could turn out that you're not self-employed after all. Uber is in the middle of a court case, appealing against the decision that its drivers are employed by the firm. The result of this ruling will not help the company's case.

If you are working for a company like Uber as a contractor, the various court cases are moving towards the idea that you are an employee. This means you are entitled to a range of benefits, including holiday allowance and sick pay and will also change how you're taxed.

This is not the first time this year that self-employed workers have been re-categorised as employees. The government has cracked down on IR35 legislation in the public sector, changing how the rules work to ensure that contractors are correctly taxed. However, the moves have been controversial, with many feeling that they unfairly penalise self-employed workers.

If you're confused about any of this, we don't blame you. However, Brookson is a specialist IR35 accountant with plenty of experience dealing with issues of self-employment. You can download our guide on IR35, or get in touch for a consultation.

By Victoria McDonnell

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