ber plans to appeal the decision which would be costly for the company as it faces bills for paid holiday, employment taxes and sick pay. The self employed have to pay Class 2 and Class 4 National Insurance, depending on profits. This is payable through self assessment from earnings over and above £8,060 per year. Employers are not liable for national insurance payments for self-employed workers.

‘Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss,' said Jo Bertram, regional general manager of Uber in the UK.

‘The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want.

‘While the decision of this preliminary hearing only affects two people we will be appealing it.'

The tribunal has decided that Uber drivers are entitled to receive holiday pay, a guaranteed minimum wage and an entitlement to breaks. The Tribunal decision will have major implications for over 30,000 drivers in London and across England and Wales and for workers in other occupations.

This could have a knock-on effect on a number of operators in the so-called ‘gig’ sectors, which have sprung up on the back of developments in apps, providing instant and oftentimes affordable services to the public

‘Similar contracts masquerading as bogus self employment will all be reviewed as a result of the case’, says the GMB union, which took the case to the tribunal after complaints of unfair working practices at Uber.

GMB won their case against Uber as the London employment tribunal has determined that Uber has acted unlawfully by not providing drivers with basic workers’ rights.

UGMB found last year that a member working exclusively for Uber received just £5.03 per hour in August after costs and fees were taken into account, significantly below the national minimum wage of £7.20.  

Maria Ludkin, GMB legal director, said: ‘This loophole that has allowed unscrupulous employers to avoid employment rights, sick pay and minimum wage for their staff and costing the government millions in lost tax revenue will now be closed.

‘Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees.

‘This outcome will be good for passengers too. Properly rewarded drivers are the same side of the coin as drivers who are properly licensed and driving well maintained and insured vehicles.’

Nigel Mackay, Leigh Day employment lawyer, said: ‘This is a ground-breaking decision. It will impact not just on the thousands of Uber drivers working in this country, but on all workers in the so-called gig economy whose employers wrongly classify them as self-employed and deny them the rights to which they are entitled.’

In a recent survey by the company a margin of almost five to one (76% to 16%) drivers say that being self-employed and being able to choose their own hours is preferable to having things like holiday pay which come with being employed.

The survey also said that 94% of drivers who responded to the survey said they ‘joined Uber because I wanted to be my own boss and choose my own hours’, with just 6% saying they ‘joined Uber because I couldn’t find other work’.

The cases were heard at Central London employment tribunal on 20 July 2016.

Earlier this month, the government announced the Taylor Review, an independent review into UK employment practices, headed by RSA chief executive Matthew Taylor. This will look into employment practice in the UK, particularly the prevalence of self-employed contracts, and general employment terms and conditions. 

HMRC declined to comment on the ruling.