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Case Law – Taxi firm Addison Lee loses appeal in worker status case

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The taxi firm has lost its latest battle to prove its cycle couriers are self-employed.

Background

This case was an appeal by Addison Lee against a decision of the employment tribunal that one of its cycle couriers was a worker rather than self-employed, and so entitled to holiday pay.

EAT Decision

The Employment Appeal Tribunal (EAT) upheld the decision of the tribunal that the terms of the contractual documentation between the parties, which sought to support the self-employed status of the claimant, did not reflect the reality of the situation and that the claimant was a worker of Addison Lee. In reaching its decision, the EAT emphasised that the starting point for determining such cases is to consider the facts rather than the law. Only if the relevant facts exist can there be circumstances that give rise to a legal obligation.

The EAT decided clearly that the written contract between the parties did not reflect the reality of the relationship and then went on to reach findings on the actual mutual expectations of the parties. They found that when the courier was logged into Addison Lee’s system, both parties expected that he was available for work, he would be provided with it and he would carry it out as directed by Addison Lee’s controller.

There was therefore a contract during the log-on periods with the requisite mutual obligations. This case has factual similarities to the worker status cases brought against Uber and CitySprint, both of which found that in light of the reality of the circumstances the claimant was a worker when they were logged into the relevant app.

Note: The Uber case is currently the subject of an appeal to the Court of Appeal, due to be heard at the end of October. Part of the government’s current consultation on worker status seeks to ensure that app-based workers like those in the Addison Lee case (as well as Uber and CitySprint) receive the National Minimum Wage for the hours that they work. In the Uber case, the judge at the EAT held that app-based workers should be paid the national minimum wage when they have the app switched on. However, the practical application of this decision is far from clear.

Implications: Employers need to know that despite whatever the "contract"/ agreement states, the Tribunals will look behind it at the circumstances and reality of the situation. Just saying they are not workers does not mean that will be upheld if ever challenged by the individuals.

One area of dispute is the time spent by app-based workers waiting to be allocated work. Should this be categorised as working time? Employers have argued that to categorise this as working time would be unfair on the basis that workers often have several apps open at once or log into an app knowing there are no tasks available. However, workers claim that being logged into an app awaiting the allocation of a task is a necessary part of the role and that they should therefore be paid the national minimum wage.

As the government consultation notes, cases such as those against Uber and Addison Lee are changing and developing the legal interpretation of working time. However, there is no easy answer to determine what is ‘working time’ in the app-based gig economy. There is also the risk that if the government determines new rules to deal with working time for app-based workers, companies operating in the gig economy could adapt their business models to circumvent this new challenge.

The decision in the Addison Lee case is a stepping stone in the development of this area of law. Hopefully, the Court of Appeal’s decision in the Uber case and the outcome of the government’s consultation on worker status will give all concerned some greatly needed clarity.


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