Uber loses landmark case over worker rights, entitling UK drivers to minimum wage and sick leave

The court ruled that Uber drivers should be classified as workers under UK's industrial laws.

The United Kingdom's courts have ruled against Uber in a groundbreaking fight over industrial protections given to the thousands of drivers who use its app, in a decision that could have ramifications worldwide.

Key points: Court decided drivers should be entitled to minimum wage

Ruling could see drivers back-paid the equivalent of more than $30,000 in entitlements

Uber appealed the decision, freezing its obligation to act until the case is brought to the Supreme Court

In a landmark decision, the Court of Appeal affirmed a 2016 ruling that classified Uber drivers as workers — entitling them to holiday pay, sick pay and a minimum wage.

The ruling radically disrupts Uber's business model, and the GMB union estimates drivers could each be owed as much as 18,000 British pounds ($31,700) in backpay and entitlements.

The case began two years ago when two Uber drivers, James Farrar and Yaseen Aslam, scored a major victory at the Employment Tribunal when it ruled the men were 'workers' under British industrial law, and therefore entitled to basic rights such as a minimum wage.

Mr Farrar had been assaulted by a passenger, but he says it took Uber 10 weeks to provide information to police, prompting him to re-examine his contract with the San Francisco-based company.

While Uber classified him and thousands of others as independent contractor, in fact they had little or no control over the running of their business and were working huge hours just to break even.

"I realised that I'm carrying all the risk, and not Uber," he told ABC News.

"And that's when we began to look at the real underlying issue here, and that's the lack of worker rights, the lack of protection, and that's was the starting point."

However, Uber appealed the Employment Tribunal's decision, effectively freezing its obligation to implement the court's ruling.

"If you look at it from Uber's perspective it's a network business that's growing very fast, powering towards an IPO next year, $120 billion, big institutional investors like the Saudi sovereign investment fund who want to make a killing on this," Mr Farrar said.

"So there's a real incentive to play for time because the judgment we received two years ago remains in suspension until Uber exhausts its appeals."

In November 2017 the Employment Appeal Tribunal found again in favour of the drivers and Uber took the matter to the Court of Appeal.

Australian barrister Sheryn Omeri had been arguing on behalf of the drivers.

Her team persuaded the court that the standard contract between Uber and the workforce was in fact invalid because of an imbalance in the bargaining power between each side and because it did not in fact properly represent the reality of their relationship.

"No-one is saying that Uber technology is a bad thing, it's a very good thing in that it enables these opportunities for people to obtain work and earn their livelihood," she said.

"The issue is it can't be permitted to expand at the expense of the rights of the people who give that technology life."

Now the decision of the lower courts has again been affirmed, but Uber has been granted leave to appeal again, this time to the Supreme Court, the highest in the UK.