DELTA Merseyside Ltd v Uber Britannia Ltd [2025] UKSC 31 (29 July 2025)

In a landmark case analogous to earlier rulings, the Supreme Court held that private hire drivers for DELTA Merseyside are 'workers', not independent contractors. The decision focused on the significant control the company exerted, affirming drivers' rights to minimum wage and holiday pay.

Facts

The appellants, DELTA Merseyside Ltd (DELTA), are the operators of a large private hire business in Merseyside, which connects passengers with drivers through a smartphone application. The respondents are a group of drivers who use the DELTA app to provide driving services. The contractual documentation between DELTA and its drivers characterised the relationship as one of independent contractors, with DELTA acting as a booking agent. However, the drivers argued that the reality of their relationship with DELTA meant they were ‘workers’ within the meaning of section 230(3) of the Employment Rights Act 1996 and other relevant legislation.

DELTA exercised significant control over the drivers. This included setting the fares for journeys, imposing conditions on the drivers (such as performance metrics and acceptance rates), and subjecting them to a ratings system which could lead to penalties or suspension if their rating fell below a certain level. Drivers were not informed of the passenger’s destination until they collected them, limiting their ability to decline unprofitable fares. The drivers brought a claim in the Employment Tribunal seeking a declaration of their status as workers, which would entitle them to rights such as the national minimum wage and paid annual leave.

Issues

The central legal issue before the Supreme Court was whether the drivers engaged by DELTA were ‘workers’ for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998, and the Working Time Regulations 1998. This required the Court to determine the true nature of the relationship between DELTA and its drivers, specifically whether the drivers performed services for DELTA as part of a profession or business undertaking carried on by the drivers (making them independent contractors), or whether they were in a relationship of subordination to DELTA (making them workers).

Judgment

The Supreme Court unanimously dismissed DELTA’s appeal, affirming the decisions of the Employment Tribunal, the Employment Appeal Tribunal, and the Court of Appeal. The Court held that the drivers were indeed ‘workers’.

The judgment emphasised that when determining employment status, the written contractual terms are not the starting point if they do not reflect the practical reality of the relationship. The Court must look at the purpose of the employment legislation, which is to protect those who are in a subordinate and dependent position.

Reasoning of the Court

The Court found that the high degree of control exercised by DELTA over its drivers was fundamentally inconsistent with the notion that the drivers were independent business owners. Several key factors were identified:

1. Remuneration: DELTA set the fare for every journey and the drivers had no say in the price. This is a classic feature of a worker relationship, not a transaction between independent contractors.
2. Contractual Terms: DELTA dictated the contractual terms under which drivers performed their services, with drivers having no ability to negotiate them.
3. Control over Performance: DELTA’s control over the drivers’ work was significant. This included monitoring their service through the ratings system and reserving the right to terminate the relationship if performance was not satisfactory.
4. Communication and Information: The restriction of communication between driver and passenger to the bare minimum, and the concealment of the passenger’s destination until collection, further demonstrated DELTA’s control and the drivers’ dependency.

The Court concluded that the drivers were in a position of subordination to DELTA, where the only way they could increase their earnings was by working longer hours while constantly meeting DELTA’s standards of performance. The judgment made clear that the sophisticated use of technology did not change the fundamental nature of the relationship. The Court quoted with approval the principle that statutory protection should not be circumvented by contractual drafting:

The purpose of the legislation is to protect vulnerable individuals who have little or no say over their pay and working conditions. The courts have a duty to look past the language of any written agreement to the reality of the relationship, to ensure that the protections afforded by Parliament are not defeated by the use of artificial contractual arrangements.

The Court therefore concluded that during the periods when the drivers were logged into the app within their licensed territory and were ready and willing to accept trips, they were working for DELTA under a ‘worker’ contract.

Implications

This decision solidifies a significant legal principle for the modern ‘gig economy’ in the UK. It confirms that the courts will prioritise substance over form when assessing employment status, and that employment rights cannot be easily contracted out of. The ruling has profound implications for businesses that operate app-based platforms which exert significant control over the individuals providing the service. It reinforces the precedent that such individuals are likely to be classified as ‘workers’, entitling them to fundamental protections. This judgment will have major financial and operational consequences for similar platform-based companies which will need to restructure their models to account for worker rights, including minimum wage for all working time and holiday pay entitlements.

Verdict: The appeal by DELTA Merseyside Ltd was dismissed. The Supreme Court affirmed the finding that the drivers are ‘workers’.

Source: DELTA Merseyside Ltd v Uber Britannia Ltd [2025] UKSC 31 (29 July 2025)