07 May 2021
The Court of Appeal has refused to hear an appeal against a decision in the Addison Lee case. The decision found that private-hire drivers were ‘workers’ and not ‘independent contractors’.
The term 'employment status' is the arrangement under which an individual is engaged to work for an organisation. The Employment Rights Act 1996 defines a worker as someone who has “entered into or works under a:
- contract of employment or
- any other contract. This can be express or implied, oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.
Determining the correct status of employment is important. It narrates the rights that individuals are entitled to when conducting their work. In Autoclenz v Belcher, the Supreme Court outlined that tribunals need to consider the true working relationship between the parties when determining this. This is the case even if what is outlined in the original contract, or other documentation is different.
The issue of private drivers and whether they are workers or independent contractors has been considered several times. The most high-profile example is the recent Supreme Court decision of Uber v Aslam. Here, the Court ruled that drivers were workers, not self-employed, due to the level of control exercised over them by Uber. Those drivers were ‘independent contractors’ in documentation they signed.
Addison Lee Ltd v Lange
Private-hire drivers for the organisation took on work under a driver contract which expressly stated they were independent contractors. They would act as sub-contractors for Addison Lee (AL) where bookings were made by AL account holders. The contract went on further to state that there was no obligation on the organisation to offer work to the driver. There was also no obligation for the driver to accept work when offered. It was up to the contractor to decide what times they would be available for work. As soon as the driver logged into a hand-held computer, they were deemed to be available and could be allocated jobs.
At the start of the relationship, the drivers were provided with the following:
- An induction period
- Documents outlining the organisation’s preferred method of working.
They were provided with the hand-held computer which notified them of a driving job. There was an expectation that this job would be accepted. Drivers who wished to turn down jobs had to give a reason. If their reason wasn’t deemed acceptable, they could be sanctioned. Most drivers had vehicles which were hired from an associated company. They were told that they could expect to work up to 60 hours a week but could log off whenever they wanted.
The employment tribunal (ET) reached a decision that the drivers were not genuinely self-employed independent contractors. Instead, taking into account the reality of the relationship, they were deemed workers who were entitled to worker rights.
The ET determined that when drivers logged into their computer this was classed as working time. The working time ended when they logged off.
Addison Lee appealed the decision on the basis that there was no obligation on the drivers to perform work. As a result, they believed they could not be workers.
The Employment Appeal Tribunal (EAT) determined the ET was correct to find nature of the working relationship was not contained in the self-employed independent contractor documents. Instead, there was an overarching contract. This dictated that drivers were to undertake work and to do this personally. In reality, drivers were regularly offered driving jobs and were expected to accept these. This meant they were carrying out work in a continuous manner.
They also upheld the ET’s conclusion that any time logged into the system to undertake driving work was working time. Even though the driver may not have been transporting a passenger during the entire period, they were at the disposal of the organisation to be allocated a job.
Court of Appeal
The Court refused AL permission to appeal. They found that in light of the recent Uber ruing, there was no reasonable prospect of success.
AL tried to argue that the circumstances of this case was different to Uber. There was no express contract between AL and its drivers after all. The Court referred to the Autoclenz principle. They found that the tribunal was still bound to assess the truth of the relationship as opposed to the intention stated by one of the parties, whether in writing or not.
There was also no arguable error in law by concluding that working time applied from the second drivers logged on to take in clients.
Note for employers
This ruling is likely not surprising for organisations. It reaffirms the previous Uber ruling on private hire drivers. Organisations operating in the gig economy are now highly advised to consider the truth of the relationship with their independent contractors. Increasingly, cases are simply not going the way organisations would wish them to. Therefore take steps to avoid being taken to a tribunal.
Be prepared for the implications of this ruling. Contact Croner today. We help you make sense of the rules affecting your business and help you stay on the right side of the law.
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