Ride-hailing firm Uber has said it will take its legal battle over the status of its drivers to the UK’s highest court after losing at the Court of Appeal.

By a majority of two to one, leading judges upheld previous tribunal decisions that drivers should be classed as workers – entitled to rights such as holiday pay.

Master of the Rolls Sir Terence Etherton ruled on Wednesday the original tribunal was “not only entitled, but correct” to find each of the claimants was driving for Uber as a “worker”.

But the company said it will challenge the ruling at the Supreme Court, after being granted permission for an appeal.

In November last year, the Employment Appeal Tribunal (EAT) dismissed Uber’s appeal against an earlier ruling of the Employment Tribunal (ET), which held that former drivers Yaseen Aslam and James Farrar were “workers” at the time they were operating for Uber.

Sir Terence, with whom Lord Justice Bean agreed, said: “As to the reality, not only do we see no reason to disagree with the factual conclusions of the ET as to the working relationship between Uber and the drivers, but we consider that the ET was plainly correct.”

Mr Aslam and Mr Farrar, who were supported by the Independent Workers Union of Great Britain (IWGB) welcomed the ruling but expressed frustration with the length of time the case has taken.

Mr Aslam, secretary of the IWGB’s United Private Hire Drivers branch, said: “It cannot be left to precarious workers like us to bring companies like Uber to account and, despite the personal price we have had to pay, we are the lucky ones.

“We know of many that are under such hardship that it would be unimaginable for them to take a multi-billion pound company to court.

“It is now time for the Government and the Mayor of London to act and stop letting companies like Uber take them for a ride.”

Mr Farrar, who is chairman of the same branch, said he was “dismayed” there would be further delay because of Uber’s appeal.

He added: “This is nothing more than a cynical ploy to delay inevitable changes to its business model while it pursues a record breaking 120 billion US dollar stock market flotation.

“It’s time for Uber to come clean with all its stakeholders and abide by the decision of the courts.”

Lord Justice Underhill, giving his dissenting ruling, said drivers should only be treated as working from the moment they accept a trip.

He said the issues raised in the appeal were matters of policy which Parliament was “better placed” to consider than the courts.

He added: “The whole question of whether and how to adapt existing employment law protections to the development of the so-called gig economy, and in particular to the use of service-provision platforms such as Uber, is under active review by the Government at present.”

An Uber spokeswoman said: “This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app.

“We have been granted permission to appeal to the Supreme Court and will do so.

“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed.

“Drivers who use the Uber app make more than the London living wage and want to keep the freedom to choose if, when and where they drive.

“If drivers were classified as workers they would inevitably lose some of the freedom and flexibility that comes with being their own boss.”

IWGB general secretary Jason Moyer-Lee added: “It is becoming increasingly ridiculous for so-called ‘gig economy’ companies to argue that the law is unclear when they lose virtually every tribunal and court case.

“Companies like Uber continue to get away with depriving their workers of basic rights because the government does virtually nothing to enforce employment law and the Tories’ so-called reforms announced this week will do nothing to change that.”

Tim Roache, general secretary of the GMB, welcomed the ruling as an “early Christmas present” for Uber drivers, with implications for the wider so-called gig economy.

He said: “We’re now at a hat-trick of judgments against Uber. They keep appealing and keep losing.

“Uber should accept the verdict and stop trying to find loopholes that deprive people of their hard-won rights and pay.”

Nigel Mackay of law firm Leigh Day, which was involved in the case, also said: “This is the third time the drivers have been victorious in their fight for workers’ rights but Uber has yet to give them what three legal decisions have ruled they are entitled to – holiday pay and to be paid at least the minimum wage.”