Uber drivers must be treated as workers, judge rules, meaning they qualify for minimum wage and holiday pay
- Latest: Uber loses ruling over drivers’ rights
- Good news for thousands of workers
- Uber could appeal again
- Breaking: UK trade deficit better than expected
- UK exports to EU rose in the last quarter
- Manufacturing growth beats forecasts
And finally….European stock markets have closed for the week, in the red.
The FTSE100 closed down 51 points, or 0.7%, at 7432. That’s its lowest level since the start of October, despite this morning’s better-than-expected trade figures.
European equity markets are in the red today as traders feel uneasy about being long going into the weekend in light on the sharp correction yesterday. The rapid move lower yesterday got traders thinking about how much markets have come in recent months, and that prompted some profit taking.
Some late news before the weekend; US consumers have become a little gloomier.
The University of Michigan’s monthly gauge of morale fell to 97.8 in October, a big fall from September.
U. Michigan Consumer Sentiment falls to 97.8 from 100.7 (100 expected). This is not surprising given high growth in consumer credit and home equity loan balances over the past two quarters, amidst lackluster wage and tapering aggregate payroll growth. Consumer feeling pinched.
Time for a quick recap.
“The decision signals what may be viewed as a curtailment of the use, or misuse, of thousands of ‘workers’ within the rapidly growing modern business phenomenon, known as the ‘gig economy’. Whilst each case will have to be decided on its own facts the EAT’s decision will no doubt make it easier for many people working in the ‘gig economy’ to argue that you have to look at the reality of the situation and not just the contract and that they now fall within the definition of ‘worker’ where previously they had been treated as ‘self-employed’ and denied access to any employment rights.
“The EAT’s decision will no doubt be welcomed and celebrated by the 40,000 Uber drivers working in the UK and many others in a similar position. However, they may wish to leave the champagne on ice pending any appeal by Uber to the Court of Appeal which will undoubtedly follow.”
“Uber drivers choose to use the app because they want the freedom to pick when they work and which trips to take. Granting drivers worker status may force Uber to schedule shifts and cut pay at peak times, leading to less choice for drivers and longer wait-times for consumers.
“It may also discourage rivals to Uber, like Lyft and Taxify, from coming to the UK hurting competition.
Britain’s economic growth rate rose to 0.5% in the last three months, according to a new report.
NIESR, the think tank, estimates that the UK growth rate picked up last month.
Although economic growth is likely to be stronger in the second half of this year compared with the first, it is important to note that activity has slowed since last year and this at a time when growth in other OECD countries has strengthened.
Looking ahead, we expect the pattern of demand in the UK economy to rebalance towards international trade in response to strengthening global growth and weaker sterling and away from domestic demand.
My colleague Rob Davies was at the Employment Appeal Tribunal this morning.
The ride-hailing firm Uber has lost an appeal against a ruling that its drivers be classed as workers with minimum-wage rights rather than as self-employed.
The landmark Employment Appeal Tribunal (EAT) ruling could have major ramifications for labour rights in Britain’s growing gig economy. The US company said it would launch a further appeal against the EAT decision.
Today’s ruling is a hammer-blow to the argument that Uber was merely providing a service to drivers who used its app to find customers.
Tim Goodwin, associate at Winckworth Sherwood, says it also shows that companies can’t simply declare that workers are “self-employed”, if the evidence doesn’t back it up.
Rather unsurprisingly, the appeal tribunal has agreed with the employment tribunal’s findings – specifically that the drivers are not self-employed, and that Uber is not some sort of technological middle-man but essentially a transportation service.
“This is a hugely significant decision for Uber, and also the gig economy more generally. Increasingly, we are seeing that courts and tribunals are reluctant to allow businesses to have their cake and eat it, by exercising enormous control over their workforce whilst also denying them basic rights like paid holiday, sick leave and protection from discrimination.
Carolyn Brown, employment partner and head of RSM Legal, believes today’s ruling has a significant impact on Uber’s business model.
She suggests that the company could now find itself facing claims for national insurance payments, and backdated VAT too.
With control being a critical factor in the assessment of the taxi drivers’ working status but a key requirement for the service Uber provides, something may have to give.
‘Probably a more pressing concern for Uber though is the possible consequences it may have on their exposure to tax and National Insurance Contribution liabilities. As it stands, Uber would not be obliged to pay employer NIC in respect of their drivers if they are self-employed. If they are workers though, they may be exposed to a significant NIC liability.
Frank Field MP, who chairs the House of Commons work and pensions committee, says today’s ruling is a ‘huge success for workers’.
[Labour MP] Rachel Reeves and I will next week be proposing to our select committees a draft bill which would make these individual, but important, skirmishes a thing of the past as legislation would protect all workers in similar situations.’
Oxford law professor Jeremias Prassl is tweeting the key points from today’s ruling:
Appeal dismissed: 'reality of the situation was that the drivers were incorporated into the Uber business of providing transportation services, subject to arrangements and controls that pointed away from their working in business on their own account' pic.twitter.com/lMRD3WiAV9
Taxi / PHD regulation irrelevant: ET was not obliged to disregard factors simply because they might be seen as arising from the relevant regulatory regime
And here's the bit on control: 'the ET had permissibly concluded there were obligations upon Uber drivers that they should accept trips offered by ULL and that they should not cancel trips once accepted' 5/5 Time for airplane mode; more in an hour. pic.twitter.com/MfIYz0MkHz
UK law firm Bates Wells Braithwaite, which represented Uber’s drivers, are understandably delighted to have won today’s ruling.
They argue that it is a critical moment in ending exploitation of workers in the gig economy.
“We are delighted with today’s judgment which is ethically and legally the right outcome. The ruling will have significant implications for approximately 40,000 Uber drivers and, more broadly, individuals engaged across the so called ‘gig economy’. We anticipate that tens of thousands drivers will now seek to make substantial back-dated claims.
“Our clients have fought tirelessly to gain the rights that they clearly should have been afforded from the outset.”
Uber could continue its battle, by appealing to the court of appeal or even the supreme court.
Nick Elwell-Sutton, partner at Clyde & Co, warns that this will mean more uncertainty for UK companies and workers.
“The final outcome of this case will provide employers with much needed clarity in this area. But uncertainty is likely to linger until the supreme court has and possibly beyond that, if the government commits to legislative changes.”
“The cloud of uncertainty looming over the gig economy has undoubtedly made new businesses in the UK cautious about building a business model around a self-employed ad-hoc workforce, which may be further stagnating growth and therefore damaging the UK economy.”
Uber losing in the EAT is highly unlikely to be the end of this case. A further appeal is almost inevitable. #ukemplaw
The Uber decision underscores the importance of sometimes looking at the actual reality of the situation rather than sticking to the strict wording of the contract when deciding who is a #worker #uber #ukemplaw
Crowley Woodford, employment partner at law firm Ashurst, believes Judge Eady’s ruling has massive consequences for other companies, as well as Uber.
“The implications of this appeal decision reach far beyond the price of a taxi journey home. Uber’s business model for its workforce has again been found to be fatally flawed; the so-called “self-employed” drivers are in fact workers entitled to basic rights such as holiday and sick pay.
This decision has re-opened a can of worms which will have a ripple effect on the financial viability of the gig economy in its current form and beyond that into mainstream industries.”
Unions are urging Uber to accept today’s ruling and “throw in the towel”, rather than continuing its fight.
TUC general secretary Frances O’Grady said:
No company, however big or well connected, is above the law.
“Uber must play by the rules and stop denying its drivers basic rights at work.
You can read the full ruling in the Uber case, here.
In it, her honour Judge Eady QC explains that the Employment Tribunal was correct to conclude that an Uber driver who had the Uber app switched on, was within London, and willing and able to accept assignments was working for Uber London Ltd (ULL) under a “worker” contract.
If the reality is that Uber’s market share in London is such that its drivers are, in practical terms, unable to hold themselves out as available to any other PHV operator, then, as a matter of fact, they are working at ULL’s disposal as part of the pool of drivers it requires to be available within the territory at any one time.
Today’s ruling confirms that Uber’s drivers in the UK are entitled to various workers’ rights such as holiday pay and the national minimum wage.
It’s another victory for the two Uber drivers, James Farrar and Yaseen Aslam, who argued successfully that they and fellow drivers were effectively employees.
Employment Appeal Tribunal rejects Uber’s appeal against ruling on workers’ rights. Landmark ruling, which will affect tens of thousands of Uber drivers, @nigelmackay representing 68 drivers #ukemplaw #gigeconomy https://t.co/4SStN0SkCb pic.twitter.com/xp9Gjy6bsP
Newsflash: Uber has lost its appeal against a court ruling that its drivers are actually workers.
An employment tribunal in London has backed the original ruling, last year, that Uber drivers are not self-employed.
Britain’s construction industry, though, had a bad September.
Construction output slumped by 1.6% during the month, the biggest fall since March 2016.
“Today’s figures indicate the shadow of Brexit still looms large over the industry – the fall in the value of the pound since the EU referendum causing imported building materials costs to rise, while company and UK investors caution is holding back investment in new projects, so many contractors’ margins are shrinking.
“Commercial and industrial sectors that rely on ambitious multi-million pound construction projects are the hardest hit, and only new builds in the private house sector, propped up by the likes of Help to Buy loans, are offering any glimmer of hope at the moment.
ONS: #construction output in 2017 Q3 was 0.9% lower than in Q2, following a 0.5% decline in Q2 so technically construction recession (albeit with activity still at relatively high levels). #constructionhttps://t.co/1AoSciCIMJ pic.twitter.com/84yJliHnIG
Yael Selfin, chief economist at HSBC UK, reckons UK exporters should be doing better…
UK September trade figures continue to disappoint, UK businesses are not taking advantage of these goldilocks times when UK major trading partners are enjoying strong economic growth and the pound is weak
Britain’s economy may finally be benefitting from stronger global growth and the effect of the weaker pound, says James Smith of ING.
He’s encouraged by the jump in manufacturing growth in September, saying:
One of the big ‘good news’ stories of 2017 is the global pick-up in growth. That, along with the weaker pound, has seen UK manufacturing sentiment rise noticeably. But for much of this year, you wouldn’t know it by looking at the production numbers.
But a sharp 0.7% month-on-month rise in production during September, following some better readings over the summer, suggests these positive drivers may finally be being reflected in higher output
Capital Economics have stripped out oil and ‘erratic’ factors from today’s UK trade figures to show how the underlying picture is improving.
While it looks like net trade detracted from q/q GDP growth in Q3, due to weaker oil exports + strong imports driven by machinery & non-monetary gold. Underlying picture still improving. pic.twitter.com/HtLBiDpIWq
Despite September’s decent figures, Britain’s total trade deficit actually widened over the last quarter to £9.5bn.
£3bn widening in the UK’s total trade deficit in Q3, to stand at £9.5bn https://t.co/Q8tsccAg8V
More good news! Britain’s factories were running full steam ahead in September.
Manufacturing output rose by 0.7% over the month, easily beating expectations of a 0.3% increase.
Here’s the official explanation of how Britain grew its exports to the EU in the last quarter:
Exports of goods to non-EU countries decreased by £1.7 billion (3.8%) between the three months to June 2017 and the three months to September 2017. As shown in Figure 2, this was due to decreases in exports of fuels (£1.6 billion) and chemicals (£1.0 billion), which offset increases in exports to non-EU countries of other commodities over the same period.
Exports of goods to EU countries increased by £0.9 billion (2.2%) between the three months to June 2017 and the three months to September 2017. The main contributor was increases in exports of transport equipment (predominately cars), which increased by £0.7 billion.
Breaking: Britain’s trade deficit has narrowed by £700m, partly due to a rise in exports to European countries.
The gap between what Britain imports and exports fell to £2.75bn in September, a better result than expected.
UK Trade Balance announcement – Actual: -11.253Bln GB, Expected: -12.80Bln GB pic.twitter.com/P2rFmV3arh
The increase in imports of unspecified goods (including non-monetary gold) and fuels from non-EU countries represents the largest increase in import commodities, alongside increases of mechanical and electrical machinery, material manufactures and fuel imports from EU countries.
German business leaders have weighed in on the tricky issue of Brexit, warning that time is running out to agree a comprehensive deal between the two sides.
Reuters has the details:
The European Union and Britain will not be able to reach a comprehensive deal on their future economic relations by the March 29, 2019, exit deadline, Germany’s largest industry group BDI warned on Friday, adding that a hard Brexit was very likely.
The two sides will need many years to complete a comprehensive deal on trade and investments, BDI managing director Joachim Lang told Reuters.
UK should bite the EU's hands off at this offer. It's a means of letting companies be part of both the EU and the UK so long as they locate in NI. https://t.co/sBJobj7Aa6
It’s a dank, grotty morning in the City of London, as traders await today’s trade figures.
The FTSE has struggled in the last couple of days, with a volatile commodity sector and a flagging set of retail stocks dragging the UK index back below 7500. As for the pound, while its seen some progress in recovering last week’s post-Bank of England losses, it’s still nowhere near its pre-hike highs. Against the dollar sterling’s the wrong side of $1.315, while against the euro the currency is straining to keep its ahead above €1.13.
We’ll see whether the latest manufacturing and industrial production figures can make anything better a bit later. The former is forecast to fall from 0.4% to 0.3% month-on-month, while the latter is expected to nudge higher, from 0.2% to 0.3%. There’s also the goods trade balance reading, with analysts estimating the deficit to have shrunk from £14.2bn in August to £12.9bn in September.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s known as Britain’s ‘other’ deficit problem — the gap between what Britain buys from the rest of the world, and what it sells back.
President Donald Trump and corporate America may not be satisfied with the revised Senate Republican tax plan. The dollar and global equities received a hit on news that Republican senators are likely to delay the introduction of corporate tax cuts until 2019. The reaction in markets wasn’t a surprise, given that investors have been pricing in a lot of good news and further pullback may continue for a couple of days or weeks, as many stocks look overbought at the moment.
The Senate wants to maintain the seven tax brackets, rather than the four proposed by the house. They also want to tax foreign profits held by offshore U.S. companies at a different rate. However, the timing of the corporate tax cuts will likely determine how markets move for the remainder of 2017.