Employment Law Update – Employment status
27 November 2018
The Employment Appeal Tribunal (EAT) has upheld an employment tribunal decision that private hire drivers were ‘workers’, entitled to paid annual leave and the national minimum wage.
Addison Lee Ltd v Lange and others, UKEAT/0037/18
Three private hire drivers sought to claim holiday pay and the national minimum wage. Addison Lee (AL) maintained that the drivers were independent contractors, as provided under the terms of their Driver Contract.
The contract stated that drivers could choose the days and times when they wanted to work and there was no obligation on either side to offer or accept work. Most of the drivers hired AL-branded vehicles from an associated company. They had to log into a hand-held device through which they were assigned jobs. Once a job was assigned, the driver was expected to accept it and could only refuse if they had an acceptable reason. A sanction could be imposed on the driver for a refusal. Drivers were permitted to log off the system at any time when they were not transporting a passenger. They would have to work for a minimum of 25-30 hours per week to recover the costs of the hire vehicle, but most worked for around 50-60 hours per week.
An employment tribunal held that the drivers were workers rather than self-employed contractors and, therefore, entitled to the national minimum wage and working time rights. It found that despite the wording of the Driver Contract, there was an overarching contract providing mutual obligations for the company to offer, and the drivers to perform the work personally. The times they were logged on via the device constituted working time for the purposes of the Working Time Regulations 1998, since they were at the company’s disposal. AL appealed the tribunal’s decision to the EAT.
The EAT has dismissed AL’s appeal, holding that the tribunal was entitled to find that the drivers, when logged on, were undertaking to accept the jobs allocated to them. It was not plausible that a driver would go through the training and induction process, and incur the expense of hiring a vehicle, without an expectation of having a fair opportunity of obtaining bookings. The tribunal was entitled to take a ‘realistic and worldly wise’ approach of the parties’ obligations, ignoring the express contractual provisions.
This decision follows a previous EAT decision in May 2018 that an Addison Lee cycle courier was a worker. In view of the growing catalogue of similar ‘worker’ decisions, it was unlikely that the EAT would uphold the appeal in this case. As with all employment status decisions, it hinged on a factual analysis of the actual arrangements in place rather than relying on what was specified in the contractual documentation.
It has been reported that the Government will shortly be taking forward proposals to reform workplace rights, including giving workers in the gig economy the right to request a temporary or fixed hours contract after 12 months, and new legislation to clarify the definition of ‘workers’. Details of the proposals have not yet been published.
This article is from the November 2018 issue of Employment Law Update, our monthly newsletter on employment legislation and regulation. To download the latest issue, please visit the newsletter section of our website. Law covered as at November 2018.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at November 2018.