Addison Lee Ltd v Lange - Court of Appeal

The Court of Appeal has refused to hear an appeal against a decision which found that private-hire drivers were ‘workers’ and not ‘independent contractors’

The term 'employment status' is the arrangement under which an individual is engaged to work for an organisation. The Employment Rights Act 1996 defines a worker as someone who has “entered into or works under a:

  • contract of employment or
  • any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services 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.

Determining the correct status of employment is important as it narrates the rights that individuals are entitled to when conducting their work. In Autoclenz v Belcher, the Supreme Court outlined that tribunals need to consider the true working relationship between the parties when determining this, even if what is outlined in the original contract, or other documentation is different.

The issue of private drivers and whether they are workers or independent contractors through their association with a hire company has been considered several times, most noticeably in the recent Supreme Court decision of Uber v Aslam. Here, the Court ruled that drivers were workers, not self-employed, due to the level of control exercised over them by Uber. This was despite the drivers being labelled as ‘independent contractors’ in documentation they signed.

FACTS

Private-hire drivers for the organisation took on work under a driver contract which expressly stated they were ‘independent contractors’ and would act as sub-contractors for Addison Lee (AL) where bookings were made by AL account holders. The contract went on further to state that there was no obligation on the organisation to offer work to the driver, or for the driver to accept work when offered, and it was up to the contractor to decide what times they would be available for work. As soon as the driver logged into a hand-held computer, they were deemed to be available and could be allocated jobs.

At the start of the relationship, the drivers were provided with an induction period, training and documents outlining the organisation’s preferred method of working. They were provided with the hand-held computer which notified them of a driving job and there was an expectation that this job would be accepted. Drivers who wished to turn down jobs had to give a reason and, if this reason wasn’t deemed acceptable, they could be sanctioned. Most drivers had vehicles which were hired from an associated company and were told that they could expect to work up to 60 hours a week but could log off whenever they wanted.

ET

The employment tribunal (ET) reached a decision that the drivers were not genuinely self-employed independent contractors. Instead, taking into account the reality of the relationship, they were deemed workers who were entitled to worker rights.

Furthermore, the ET determined that when drivers logged into their computer this was classed as working time, until they logged off.

Addison Lee appealed the decision on the basis that there was no obligation on the drivers to perform work, therefore, they could not be workers.

EAT

The Employment Appeal Tribunal (EAT) determined that the ET was entitled to find that the true nature of the working relationship was not contained in the self-employed independent contractor documents. Instead, there was an overarching contract where drivers were undertaking to do work and to do this personally. In reality, drivers were regularly offered driving jobs and were expected to accept these, therefore they were carrying out work in a continuous manner.

They also upheld the ET’s conclusion that any time logged into the system to undertake driving work was working time. Even though the driver may not have been transporting a passenger during the entire period, they were at the disposal of the organisation to be allocated a job.

COURT OF APPEAL

The Court refused AL permission to appeal, finding that in light of the recent Uber ruing, there was no reasonable prospect of success.

Although AL tried to argue that the circumstances of this case was different to Uber, as there was no express contract between AL and its drivers, the Court referred to the Autoclenz principle. They found that the tribunal was still bound to assess the truth of the relationship as opposed to the intention stated by one of the parties, whether in writing or not.

There was also no arguable error in law by concluding that working time applied from the second drivers logged on to take in clients.

Note for employers

This ruling is likely not surprising for organisations, reaffirming the previous Uber ruling on private hire drivers. Organisations operating in the gig economy are now highly advised to consider the truth of the relationship they are maintaining with those they consider to be independent contractors. Increasingly, cases are simply not going the way organisations would wish them to and they should therefore take steps to avoid being taken to a tribunal.  

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