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Another employer challenge to worker status ruling rejected

  • United Kingdom
  • Employment law


The Employment Appeal Tribunal (EAT) has today rejected an appeal by private hire taxi company Addison Lee against a tribunal decision that three of its drivers were ‘workers', entitled to paid holiday and the national minimum wage.

One of the main issues raised in the appeal was whether the tribunal was right to conclude that the drivers were contractually obliged to do at least some driving work for the company notwithstanding that the written terms they had signed up to said drivers were under no such obligation.

On this point the EAT upheld the tribunal’s decision that this aspect of the written terms could be ignored because it did not reflect the reality of what had been agreed: there was, the EAT said, ample evidence to support the tribunal’s finding that, notwithstanding the written terms, when a driver opted to log on to the computerised system the company used for allocating driving jobs, the driver had to accept a job allocated in the absence of an acceptable reason. That conclusion was supported by the fact that the company could and did impose sanctions if a driver did not accept a job allocated.

The EAT also upheld the tribunal’s conclusion that the drivers were under at least some obligation to log on to the company’s system to work, even though the drivers had a great deal of leeway as to when and where they logged on. In support of that finding the EAT observed that ‘no honest driver would put the Respondent to the expense of considering his application to join, checking his credentials, training him and putting him on its system unless he was undertaking to do some work for the Respondent.’

This is the latest in a series of recent cases considering the employment status of casual or freelance workers, including in the ‘gig-economy’. It follows a ruling in May that a cycle courier working in Addison Lee’s courier business was also a worker (read our briefing). That case has been appealed to the Court of Appeal. It is not yet clear whether the company will ask for permission to appeal today’s decision alongside it. Either way, the next significant ruling on employment status is likely to come in a few weeks’ time when the Court of Appeal determines Uber’s appeal against a decision that two of its drivers were workers.

Given the growing number of tribunal claims in this area, and the accompanying publicity, employers should review the employment status of their freelance and contracting workforce. The risk is that misclassifying a worker as an independent contractor may result in large financial exposure to unpaid wages at minimum wage rates, holiday pay, auto-enrolment pension and other entitlements, particularly where significant numbers of workers are involved.

Click for Addison Lee v Lange, Employment Appeal Tribunal, 14 November 2018