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Gig Economy Employers - Your Employment Practices Could Be Unlawful

on Friday, 23 November 2018.

We have seen Uber and Pimlico Plumbers, now it’s the turn of Addison Lee (AL) taxi and delivery drivers to be deemed to have worker status, despite the wording of their contracts.

What Factors Led to the Drivers Being Classed as Workers?

Employment status cases are always fact specific as tribunals analyse how the day to day relationship between company and claimant worked. The facts which influenced the EAT in this case:

  • Drivers received an induction, a code of conduct and training from AL. The tribunals found it unlikely that a company would invest so much into an individual, unless they had some real expectation that they would do work for them in return.
  • All but one of the 4,000 drivers hired their vehicle from an associated company of AL. To be able to cover the costs of the vehicle hire, drivers needed to work at least 25-30 hours per week. In reality most drivers worked an average of 50-60 hours per week. The tribunals held that by taking on such a financial commitment the drivers were obliged to log on and drive.
  • AL was authorised to deduct the vehicle hire costs directly from the wages of drivers, and the drivers' use of the vehicle was restricted and regulated (the cars had to wear unmovable AL branding). This sort of control over the drivers indicates that they were not truly self-employed, as self-employed contractors will usually have more autonomy over the financial and working aspects of a job.
  • There was no express obligation for AL to offer work or for the drivers to accept, but if AL deemed a driver's reason for declining a job unacceptable, the driver could face a sanction. In reality, there was regular offer and acceptance of work, with many of the drivers working pretty much continuously.

  • To be able to offer the on-demand service that they do, AL needs drivers to log on and to be available immediately for jobs. And the drivers need to do so in order to pay the vehicle hire costs and then start earning money. The tribunals held that there was a realistic expectation by the drivers that work would be offered when they logged on and AL must have expected the drivers to log on and work in sufficient numbers and for sufficient hours.

Overarching Contract

The EAT determined that drivers had worker status during each individual assignment, when they were logged on and working for AL. The EAT also determined that as the drivers were working pretty much continuously for AL, they also had an overarching contract with AL. This meant that the workers could make longer backdated pay claims in respect of holiday pay, sick pay and national minimum wage.

Time 'Logged on' Is 'Working Time'

Working time is defined as “any time during which a worker is working, at his employer’s disposal and carrying out his activities or duties”. A worker should receive national minimum wage during working time.

Although the drivers were able, to a certain degree, to do as they pleased while they waited for a job to be assigned, the EAT determined that all of the time that the drivers were logged on was 'working time', thereby giving a larger reference period for national minimum wage calculations. The reasoning referred to the fact that drivers were not allowed to log on from home, they needed to be in their vehicle and available for work.

What Does This Mean for Employers?

This decision was on all fours with the previous gig economy cases and so is a further warning to gig economy employers that their employment practices may well be unlawful.

Employment Tribunals are increasingly unwilling to believe the written word and will scrutinise how the relationships works in realistic and worldly-wise manners. Heavy caution is therefore advised to any employer when using contractor agreements to avoid more costly employment liabilities.

We await the judgement from the Court of Appeal in the Uber case. If the Court of Appeal finds in favour of Uber, this could well bring into question all current judgments on gig economy and employment status.

For further information or to review your policies, please contact Helen Clayton in our Employment Law team on 0117 314 5457.

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