This is another case in a long line of cases making their way through the Employment Tribunal system about the status of persons who are working in the ‘gig’ economy. This time it involves the drivers who work for Addison Lee.
There are currently three status that someone who works for you can have, an employee, a self-employed person or a worker.
Workers have less employment rights than employees, but more than self-employed contractors or service providers.
The Employment Rights Act defines a Worker as;
‘An individual who has entered into or works under an employment contract, or any other contract whereby the individual undertakes to do or perform personally any work or service 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.’
This is clearly not comprehensive or easy to apply and therefore if there is a dispute about someone’s status the Employment Tribunal will look at a number of factors and will determine what the true nature of the working relationship is and this can mean ignoring the ‘label’ which has been put on the relationship in any contract between the parties.
Mr Lange worked for Addison Lee who provide private hire taxis and courier services. Mr Lange, and two of his colleagues had been given an induction, training and documentation explaining how he should do his job, including the need to wear a uniform. The drivers hired a car from a company associated to Addison Lee and were given handheld computers, from which they obtained their jobs.
When logged into the Addison Lee computer system the drivers were obliged to accept jobs. If they refused a job, there were possible sanctions in place.
The contract in place stated that the drivers were ‘independent contractors’ and that nothing in the contract would render them an employee, worker, agent or partner of Addison Lee.
Mr Lange pursued a claim in the Employment Tribunal asserting that he was entitled to payment at the National Minimum Wage to cover the period in time that he was logged on to Addison Lee’s systems but was not actually working on jobs. He also claimed entitlement to holiday pay.
Addison Lee disagreed and argued that Mr Lange and colleagues were actually independent contractors.
At the Employment Tribunal it was decided that Mr Lange was a worker, Addison Lee appealed.
At the Employment Appeal Tribunal Addison Lee argued that the drivers were not workers as they had no obligation to perform work and that merely being logged in to their system does not constitute working time.
The Appeal Tribunal disagreed, and the appeal was dismissed. Mr Lange and his colleagues were workers, and that the contract terms between Addison Lee and the drivers did not reflect their true relationship.
The Appeal Tribunal also agreed with the initial Tribunal decision that any time spent logged into Addison Lee’s system, even if they were not carrying passengers, should count as ‘working time’.
Points to note
The law concerning employment status is continuing to develop and the government have recently consulted on this issue, with the outcome likely to result in more certainty for business and individuals about employment status.
In my view it is likely that the tests to determine employment status will change to give more clarity soon, so it is something to keep an eye on.
Action to take
1. If you use ‘self-employed contractors’ or ‘consultants’, review whether this is the true nature of your working relationship and that any label you place on the relationship truly reflects how you work.
2. Consult with a specialist solicitor to review your contracts and amend accordingly if necessary. This is a developing area of law so your adviser needs to be fully up to date on the law and cases in this area.
You can also listen to Episode 102 of the Podcast which covers the Supreme Court decision in the Pimlico Plumbers Case
This article was written and researched by Abigail Stiles, Business Administration Apprentice
Don’t forget getting advice from a Solicitor does not have to be complicated or costly!
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