The EAT has upheld the Employment Tribunal’s decision that private hire drivers who work for Addison Lee were ‘workers’ and not self-employed, entitling them to basic rights such as national minimum wage and holiday pay. Although their contracts stated that they did not have to accept any work given to them and Addison Lee was under no obligation to offer it, the tribunal was right to adopt their ‘realistic’ approach and find that the contract did not reflect the working arrangements.
The drivers working for Addison Lee usually hired a vehicle from an associated company of Addison Lee, for which they signed a Vehicle Hire Agreement enabling hire costs to be collected from the driver’s earnings under their Driver Contract. They are all provided with hand held devices which they log into when ready to begin work and which allows Addison Lee to assign work to the drivers. When a job is assigned the driver is expected to accept it and must give a reason for refusing for which a sanction may be issued if this is not deemed reasonable. The hand held device also has a button to declare when a driver is taking a break and when they are ending work and going home. While drivers were not promised a specific amount of work, Addison Lee did set out that an average driver is expected to work between 50-60 hours a week and would need to work between 25-30 hours per week to recover the fixed costs of vehicle hire.
The ET concluded that the drivers were workers. It found that there was an overarching agreement that provided for a mutual obligation to offer and perform work, despite what was set out in the Driver Contract. In particular, it found that there was an economic obligation on the drivers to earn money to cover the cost of the hire vehicle as set out in the hire agreement. Furthermore, drivers had a ‘realistic expectation’ of being offered work when they logged on to their hand held device and they were obliged to work personally once they logged on. The drivers were working during the whole time they were logged on to their devices regardless of whether they were driving a customer.
The EAT agreed with the ET’s decision referencing the Pimlico Plumbers case in their decision and the regularities of offering and accepting work so that it becomes continuous and can be justified that the drivers felt they had worker status. It agreed that the drivers were workers due to the overarching Driver Contract and although it specified that there was no obligation to accept work or for Addison Lee to offer work it was not realistic to believe that a driver would sign the contract with the intention not to undertake work.
This decision is not surprising and is consistent with the direction of travel for ‘Gig Economy’ employment status cases. Addison Lee also lost an earlier appeal in the EAT on the same subject. Again, these cases serve as reminders to employers to check the arrangements they have with any ‘self-employed’ contractors and ensure that their status can be justified if necessary.
Employers need to audit ‘self-employed’ contracts but remember that contractual wording will not help if the contracts are effectively a sham and working practices mean the individuals are workers or employees. The recurring theme in recent cases has been a focus on the level of control exerted by a business over the individual – so the starting point is looking at how autonomous the individual is.
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.