07 December 2016

The Uber case could increase the number of people entitled to be auto-enrolled.

Cases on holiday pay and equal pay could increase costs depending on the definition of "pay" a pension scheme uses. 

These cases are in their early stages and are unlikely to reach final decision for a considerable time.

Meanwhile employers and business operators, including those in the gig economy, should take stock of the possible pensions consequences for them.

In the longer term, depending on the outcome of these cases and others that might follow, terms and conditions for large numbers of people could be affected.

In the background, a Select Committee is looking at the future of work and the status and rights of those who undertake it.


In a test case, an employment tribunal (ET) has held that, under Uber's business model, drivers are "workers" for the purpose of employment law. They are not self-employed, as Uber argued. This means they are entitled to employment rights that are unavailable to self-employed contractors.

On the pensions side it is likely to mean they are entitled (subject to age and earnings) to be auto-enrolled or to join a scheme at their option.

For now, the case only has these impacts for Uber itself, not for other businesses. Uber has said it will appeal. 

Holiday pay 

Several cases are exploring whether the calculation of holiday pay must compensate for variable elements of pay a person would ordinarily have been able to earn had they not been on holiday. One case is about contractual results-based commission and another is on payment for regular voluntary overtime, for example.

Pay structures vary widely and outcomes in individual cases may turn on their specific facts.

Equal pay

In a preliminary decision, an ET has allowed a mainly female group of Asda store employees to use a mainly male group of distribution depot employees as comparators in an equal pay claim. Asda might appeal against this decision.

If the case develops in the claimants' favour, it could open the way for other large scale equal pay claims where there are significant differences between two groups of employees.

Equal pay cases are often complicated and can take a long time to reach a conclusion. 

If the claimants are successful, pensions will be one potential head of additional cost for the employer to consider.

Select Committee

Policy developments might also impact on pension costs. The House of Commons Select Committee on Business, Energy and Industrial Strategy has started an inquiry into the future of work. It will focus on the changing nature of work and on the status and rights of agency workers, the self-employed and those working in the gig economy. 

Key contact

Richard Knight

Richard Knight Partner

  • Head of Pensions Practice
  • Pensions Services
  • Pensions Legal Advice

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