Latest employment status ruling delivers another blow to the gig economy

There have been several recent cases in which individuals working in the gig economy have argued that they are workers, not independent contractors, and so entitled to employment rights, such as the minimum wage and holiday pay. In the most recent, the Employment Appeal Tribunal (EAT) upheld an employment tribunal’s decision that mini-cab drivers were “workers” and had been wrongly labelled as ‘independent contractors’.

The three claimants in that case worked at Addison Lee Limited, a London-based minicab company. They brought claims against Addison for holiday pay and for the national minimum wage which required them to show they had the status of a worker and were not self-employed. Addison argued that the claimants were self-employed.

The ET (with whom the Employment Appeal Tribunal agreed) upheld the claimants’ claims that Addison had wrongly categorised them as independent contractors. Although the claimants had signed a contract that expressly stated that they were self-employed, the ET concluded that the contract did not properly reflect the reality of the working relationship. The true working arrangements were that drivers at Addison:

  • hired their vehicle in Addison’s branding from a company associated with Addison
  • had to wear Addison’s branded clothing
  • had a realistic expectation of being offered work
  • were obliged to carry out personally a job that was assigned to them
  • could suffer penalties if they failed to meet performance targets
  • would need to work between 25-30 hours per week to recover the fixed costs of vehicle hire
  • could not work for any other minicab businesses.

Comment

In other recent decisions, bike couriers, Uber drivers and plumbers have each been found to be workers rather than self-employed contractors. An important factor in those cases was that the claimants were obliged personally to carry out the work and did not have a right to use a substitute and this may be a key reason for the different outcome in a case involving Deliveroo in which the claimant had the right to delegate work assigned to him. As the law currently stands, a genuine right of substitution is likely to be a factor that weighs heavily in favour of self-employment.

Addison Lee Ltd v Lange.

 Warning

This article is not a substitute for legal advice. The information may be incorrect or out of date and does not constitute a definitive or complete statement of the law. This article is not intended to constitute legal advice in any specific situation. Readers should obtain legal advice and not rely on the information in this article.