Drivers for the cab-hailing firm Uber will learn later whether they are entitled to holiday pay, rest breaks and the National Living Wage.
An employment tribunal in London is due to rule on whether Uber is acting unlawfully by not giving drivers basic employment rights.
Uber says its drivers are self-employed and that they can choose where and when they drive.
The case could have big implications for Uber and similar businesses.
Uber says it has 40,000 drivers in the UK. It uses a smartphone app to connect them to people who need a cab.
But the drivers are all “independent contractors” or self-employed.
At a tribunal case taken by the GMB union this summer, two drivers argued that Uber was unlawfully failing to provide drivers with basic employment rights.
They argued that far from being self-employed, Uber drivers should be classed as workers, which under employment law would entitle them to certain rights, including sick pay.
The two test cases will determine a further 17 claims against the firm.
New paradigm or new ploy?
The closely watched case could have consequences for other “platform” firms, which harness new technology to tap into the self-employed.
“This case represents the first proper legal review of whether jobs in this part of the so-called gig economy really represent a new paradigm of freedom and self-employment, or in fact are simply a new technology ploy to deny employed workers ordinary employment rights and a national minimum wage,” says Maria Ludkin, legal director at the GMB
“In our view Uber’s business model is underpinned by the shaky foundations of worker exploitation and tax avoidance, both of which end up being underwritten by the ordinary taxpayer.”
The company insists it is simply a technology platform that links supply with demand – in this case the supply of self-employed drivers with demand for cabs.
It believes that most drivers want to be self-employed.
“The main reason people choose to partner with Uber is so they can become their own boss, pick their own hours and work completely flexibly. In fact two-thirds of new partner-drivers joining the Uber platform have been referred by another partner,” says Jo Bertram, regional general manager for Uber UK.
This is the first time that Uber has faced legal action in the UK over the status of its drivers. The firm has attempted to settle a similar case in the US.
Some believe that if the tribunal backs the two drivers, it could undermine the firm’s business model.
“The financial implications are certainly staggering, if they have to pay the minimum wage and provide other employment benefits,” says Alex Mizzi, employment lawyer with the legal firm Howard Kennedy.
“So I think they’re going to be looking very swiftly at whether there are alternatives, whether they can change the way they operate or their contractual terms.”
A number of other platform firms are also facing legal challenges.
In November, an employment tribunal will hear a similar case that has been taken against courier firm City Sprint by the Independent Workers Union of Great Britain.
“I think anyone who runs a business which is putting labour demand in touch with labour supply will need to look very carefully at the judgement today to determine whether that will also have implications for their businesses,” says Ms Mizzi.
Whatever the tribunal decides in the Uber case, the outcome is likely to be appealed against.
But all these cases echo concerns about the growth of insecure work, an issue that recently led the government to announce a review of employment practices.