GMB, the union for professional drivers, has won a case against ride sharing company Uber over the status of its drivers, potentially setting up a precedent with far reaching implications for the so called ‘gig economy’.

Traditionally, Uber has classed its drivers as being self-employed, rather than as workers, meaning drivers are not entitled to a number of benefits they would otherwise be entitled to, such as holiday pay and the National Minimum Wage (NMW).

There are currently about 30,000 Uber drivers operating in the London, and a further 10,000 in the rest of the UK. It has 2m passengers registered in London alone.

In July, professional drivers’ union GMB brought two cases against Uber to the Central London Tribunal Court, arguing that this was unfair.

In one of the cases, GMB claimed a driver had worked exclusively for Uber for £5.03 an hour in August 2015, once costs and fees had been taken into account. This is markedly below the NMW of £7.20.

The Tribunal has now sided in favour of the drivers, writing in its judgement that the claimants were indeed employed as workers, and therefore entitled to the various benefits that being an employee would bring.

GMB described the decision as monumental. Maria Ludkin, GMB legal director, said: “This is a monumental victory that will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife.

“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, who worked with GMB on the case, said: “We are pleased that the employment tribunal has agreed with our arguments that drivers are entitled to the most basic workers’ rights, including to be paid the National Minimum Wage and to receive paid holiday, which were previously denied to them.

“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.”

Uber said it planned to appeal the decision, while GMB said it planned  to review other sectors within the economy  which made use of similar self-employment contracts.