Case update (1): Employment status – ‘Self-employed’ private hire drivers

Summary: Were private hire drivers ‘workers’ or independent contractors as provided under the terms of their Driver Contract?

‘Workers’, said the EAT in the case of Addison Lee Ltd v Lange and others, available here.

Facts:  The claimants were all private hire drivers engaged by Addison Lee. As part of the agreement between Addison Lee and the drivers, each driver had to log into a portable computer, which allowed work to be allocated to them automatically. Once a job was assigned, the driver was expected to accept it and could only refuse if they had an acceptable reason. A sanction could be imposed on the driver for a refusal. Drivers were permitted to log off the system at any time when they were not transporting a passenger. They would have to work for a minimum of 25-30 hours per week to recover the costs of the hire vehicle, but most worked for around 50-60 hours per week.

The relevant contractual arrangements described each driver as an independent contractor and stated that they had no obligation to accept work, and Addison Lee was under no obligation to offer work.

The Tribunal decided that each driver was a worker and therefore entitled to paid annual leave and the national minimum wage.  The Tribunal found there was an overarching agreement providing for Addison Lee to offer work and for the drivers to accept work. In particular, there was an economic obligation on the drivers to log on and earn money in order to cover the cost of hiring their vehicle. When logged onto the portable computer, the Tribunal considered that the drivers had an expectation of being offered work and were then obliged to perform the work personally.

Addison Lee appealed the Tribunal’s decision that each driver was a worker.

The EAT dismissed Addison Lee’s appeal, holding that the Tribunal was entitled to find that the drivers, when logged on, were undertaking to accept the jobs allocated to them. It was not plausible that a driver would go through the training and induction process, and incur the expense of hiring a vehicle, without an expectation of having a fair opportunity of obtaining bookings. The tribunal was entitled to take a ‘realistic and worldly wise’ approach of the parties’ obligations, ignoring the express contractual provisions.

The EAT also noted the Pimlico Plumbers case (see our update here), where the regular offer and acceptance of work supported a finding of worker status.

Implications: This decision reiterates a key point: Tribunals can look behind any contractual arrangements (no matter how much expense and creativity has gone into their drafting) when determining the status of individuals.

The decision follows a previous EAT decision in May 2018 that an Addison Lee cycle courier was a worker and other similar cases which we have updated you on here. In view of the growing catalogue of similar ‘worker’ decisions, it was unlikely that the EAT would decide against the claimants.  However, as with all employment status decisions, it hinged on a factual analysis of the actual arrangements in place, rather than relying on what was specified in the contractual documentation.