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Driven out of the gig economy

Since the Uber case in October 2016 which saw an Employment Tribunal decide that Uber drivers were not self-employed but were in fact workers, there has been a rise in claims relating to employment status in the “gig” economy.

Another key decision has been reached relating to whether drivers of a taxi company, Addison Lee, should have been classified as workers, rather than self-employed, and were therefore entitled to rights such as the national minimum wage and holiday pay.

The three drivers who brought the claims against Addison Lee had worked for the company from 2014. Addison Lee sets out in each Driver Contract that drivers are self-employed and that nothing in the agreement creates an employer/employee relationship between the driver and Addison Lee. The drivers were responsible for their own tax, national insurance and VAT and were free to choose the days and times when they wished to provide services to Addison Lee with no obligation of a minimum number of hours.

However, the drivers argued that they were in fact workers as they were obliged to “preserve the integrity of the brand” by complying with several agreements/contracts and the Driving Operating Guide. They had to be interviewed and undertake training and induction. Each driver was then given a handheld technological device which was used to accept journeys that were booked through Addison Lee’s app, website and by phone to the company. Without the handheld devices drivers could not pick customers up as all bookings went through this device and it also enabled Addison Lee to track a driver’s vehicle. If bookings were not accepted and an unacceptable reason was given for the refusal, the driver would then be referred to a supervisor and sanctions may be brought against them.

The driver vehicles were hired from Addison Lee (a contract that they could terminate at any time) and drivers had to maintain a certain level of maintenance and cleanliness of the vehicles. All vehicles had to be serviced every 5000 miles; a delay in servicing a vehicle resulted in a fine. Addison Lee set out dress codes and cleanliness of vehicle standards it expected the drivers to uphold, and employed people to perform spot checks to see if the drivers were compliant. Drivers could use the branded Addison Lee vehicles for private purposes but this “excess” mileage was monitored and regulated.

Addison Lee also provided the drivers with scripts to suggest how they might conduct themselves with customers such as asking if they had any baggage or a preferred route for their journey. They also specified that they should avoid any conversations relating to sex, politics, religion or anything controversial. New drivers were monitored closely for the first 4 weeks and if successful were upgraded in status and were required to enrol on a diploma course run by Addison Lee. If the drivers wished to take a holiday they would usually inform Addison Lee in advance but it was known to them that if a driver was logged off the system for more than 3 days without any notification, Addison Lee would make contact with the driver to find out why. Addison Lee also enforced a service charge of £35 if there was not a minimum amount of work carried out each week under their points system.

The drivers argued that they were under contract with Addison Lee every time they logged on and worked on their systems. They therefore brought claims that they should be paid the national minimum wage and holiday pay.

Decision

The Employment Tribunal decided that the drivers were workers and not self-employed. They concluded that there was an overarching contract every time the drivers logged in to work. It set out that drivers had to apply to Addison Lee and be subject to certain checks; they had to have the relevant licence, be interviewed for suitability, have an induction and attend knowledge school to be tested on their knowledge of London. They also had to sign two agreements which included a hire agreement which was a serious financial commitment. Therefore, it is impossible to say that the drivers were not undertaking to carry out driving work for Addison Lee in vehicles they are agreeing to hire from them. Although the drivers are free not to do so and can choose when they do it, the commercial reality was that they are undertaking work for Addison Lee as soon as they log on to their systems. The Employment Tribunal stated that there must have been an expectation from Addison Lee that the drivers would work for sufficient hours when logged in so as to fulfil their own business model. Furthermore, the drivers also remained under Addison Lee’s rules between driving jobs as the use of their vehicle is restricted with excess mileage being monitored and the inability of the drivers to remove Addison Lee insignia. The driver contract therefore remains in force even when the drivers are not logged on to the company’s systems.

The Employment Tribunal considered the drivers to have worker status and therefore entitled to the national minimum wage and holiday pay.

Comment

With the rise of the gig economy and new technologies there has also been an increase in cases on employment status. If your business has relationships with ‘self-employed’ contractors who provide services to the business on a regular basis, it may be worthwhile reviewing the arrangements that are in place and also conducting an audit of all persons providing services to your business who are not employees to ensure that appropriate contractual arrangements are in place..

If you have any queries in relation to employment status or any other HR queries then please do not hesitate to contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

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