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Uber Drivers - Employment and Self-Employment - Ankara Agreement

23 November 2016

Readers may have heard about an interesting case at the London Central Employment Tribunal brought by some Uber taxi drivers. These drivers, of whom there are many, are engaged by Uber to carry passengers, and Uber maintains that all these drivers are self-employed, not employees of the company. To put it another way, they consider that each driver is their own boss and is a little business on their own, so the relationship between Uber and its drivers is a business-to-business relationship.

Some of the drivers, however, took the view that they were, in reality, employees of Uber. This is not one of these cases - like whether sparkling wine produced in the wrong part of France can be called "champagne" - where the primary issue is nomenclature. There is a lot more at stake here, both for Uber and for the drivers, because if the drivers truly are employees then Uber will owe them probably quite substantial sums of money. Unlike employees, self-employed people do not qualify for the national minimum wage and neither do they qualify for paid holiday leave.

In the event the Employment Tribunal took the strong view that the drivers were employees, not self-employed, and Uber lost heavily (but they have appealed).

Whatever the outcome of this particular case, the employment/self-employment issue is not a new one, and the tribunals and courts have on many occasions been required to make decisions as to whether particular individuals are one or the other. Sometimes it goes one way and sometimes the other; on occasion (although not in the Uber case) the issues are finely balanced.

And in UK immigration law the distinction is sometimes an important one. For example, foreign students in some cases are allowed to work part-time, but such work must be in employment, not self-employment. (To put it short, foreign students are not allowed to run a business.)

But in other cases a working visa holder is required to run a business, not work as an employee of somebody else’s business. Tier 1 Entrepreneurs, for example, must be genuinely running a business, not working in "disguised employment", as UK Visas & Immigration sternly puts it.

And the same is true of ECAA "Ankara Agreement" business visa holders. An important requirement of the visa is that the migrant is genuinely operating a business. Sometimes there is no issue about this. For example, if an applicant plans to set up a business from scratch with their own resources and carry out marketing to find their clients then there may not be any issue about disguised employment (although of course the decision-maker may come up with other matters they are not satisfied about).

But in other cases the position is not so clear. For example, if an Ankara Agreement business applicant seeks to join an existing business this is an issue that may arise. The applicant needs to demonstrate that they are genuinely joining the business as an investor, partner and decision-maker, not as a disguised employee. And sometimes this is difficult to prove; the UKVI may take the view that the applicant is using the business as a vehicle to escape from the full rigours of the genuine businessperson test.

And a really classic Ankara Agreement business scenario is where a hairdresser seeks to rent a chair in an already-established hairdressers and thus run their own business within a business. Such an applicant may claim that they will have their own clients, use their own equipment, have their own cash till and operate quite separately from the business in which their premises is physically situated, and make the application on this basis. But UKVI decision-makers are notoriously suspicious of such applications, and the applicant faces an exceedingly uphill struggle to convince them that it is not a case of disguised employment.

So with immigration applications where the applicant is required to demonstrate that a proposal is a genuine business proposal, not in reality an employment arrangement, they are well advised to take good legal advice before applying.




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