"Uber must now face up to its responsibilities and give its workers the rights to which they are entitled", said GMB legal director Maria Ludkin.
The US ride-hailing app appealed against the ruling, insisting its drivers were self-employed.
Uber refuted those claims, "The tribunal relies on the assertion that drivers are required to take 80 percent of trips sent to them when logged into the app".
Drivers James Farrar and Yaseen Aslam won a case against the ride-hailing app a year ago after arguing they were workers and entitled to the minimum wage, sick pay and paid holiday. Employment lawyers expect the case will be heard by the Supreme Court next year.
Uber was dealt another huge blow in the United Kingdom on Friday after it lost an appeal over drivers' employee rights.
Uber challenged the ruling saying it could deprive drivers of the "personal flexibility they value" but lost their case today.
Friday's ruling by the British employment appeals tribunal came after San Francisco-based Uber appealed a previous ruling in favor of the drivers.
Regulator Transport for London has threatened to cancel Uber's license in the British capital over its dissatisfaction with the company's background checks on drivers and the way it shares information with authorities about criminal offenses.
The GMB workers' union, which had backed the case, said the ruling by the UK's Employment Appeal Tribunal (EAT) was a "landmark victory" for workers' rights in the so-called gig economy, a system of casual working which does not commit a business or a worker to set hours or rights. The decision reflects a general trend for the courts to step in situations in which "the individuals involved are in a position of substantial inequality and in that case merit protection", said employment attorney Susannah Kintish of Mishcon de Reya, which is not involved in the Uber case.
"There's a definite sentiment that the law needs to step in and protect them", she said. Uber appealed the decision, which allows it to operate until the hearing in December. Following the licensing decision, Uber's new CEO, Dara Khosorwshahi, acknowledged that Uber "got things wrong" in the past and said the company would change as it moves forward.
On Friday it confirmed it would appeal against the latest decision.
In the meantime, the ripple effects of the case will expand.
Taxi app Uber [UBER.UL] lost a bid on Friday to overturn a decision by a tribunal which had said its drivers deserved workers' rights such as the minimum wage, in a blow to the company as it also battles to keep its license in London.
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