Gig economy employers should consider right to work checks following Uber case, says expert

Employers are generally familiar with the requirement to perform right to work checks against their employees, but many do not conduct them against workers, as these individuals are not classed as employees, according to corporate immigration expert Joanne Hennessy of Pinsent Masons, the law firm behind Out-Law.com. However, the UK immigration authorities were often reluctant to accept the "subtle distinction" between the two types of individual, she said.

"The relevant immigration legislation describes employees as 'those under a contract of service or apprenticeship'," she said.

"Employing someone who does not have the right to work in the UK can result in civil liability of up to £20,000 per illegal employee, plus criminal liability. Carrying out right to work checks, as prescribed by the government, will secure a defence to such civil liability. We have experience of employers receiving illegal working civil penalties in respect of casual workers against whom they had not conducted right to work checks," she said.

"This is an issue that the taxi industry will be increasingly aware of, given that right to work checks are to become a requirement for taxi and private hire vehicle licensing under the 2016 Immigration Act. In the meantime, firms such as Uber and others operating in the 'gig' economy should keep this in mind and be aware of the illegal working exposure that worker status can create. If there is any uncertainty as to whether someone is a worker or self-employed, it would be sensible to ensure they have the right to work in the UK or risk significant exposure to illegal working penalties," she said.

On Friday, an employment tribunal in London upheld the claims of two Uber drivers who had argued that they were 'workers', and therefore entitled to the protection of both national minimum wage and paid holiday leave. It did so on the grounds that the drivers had no contractual relationship with the ultimate customer and, while working for Uber, had very limited control over how they carried out the work and what could be charged.

Workers are not the same as employees, and do not have the same redundancy or unfair dismissal rights. However, they do have the right to the national minimum wage under the National Minimum Wage Act and paid holiday leave under the Working Time Regulations. Uber had attempted to argue that its drivers were self-employed and under no obligation to work for the company; and that it did not run a transport business and was merely a technology company. The documentation setting out the relationship between the drivers and Uber was consistent with its interpretation of the facts.

New immigration offences which came into force in July mean that it is now easier to prosecute businesses that employ illegal workers. Employers can now be prosecuted if they have "reasonable cause to believe" that they have employed an illegal migrant, meaning that an employer must now be able to prove that it took reasonable steps to check that individual's immigration status before employing them. The Immigration Act also introduced new rules requiring UK licensing authorities to ensure that applicants have the right to work in the UK before granting a taxi or private hire licence.