EAT upholds decision that Addison Lee drivers are workers

16th November 2018 Employment

The Employment Appeals Tribunal (EAT) has confirmed an earlier ruling that three Addison Lee drivers, represented by the trade union GMB, are workers and not independent contractors the latest high status gig-economy case.

How was the decision made?

Each driver is provided with two contractual documents by Addison Lee, a Vehicle Hire Agreement and a Drivers Contract. Both refer to the drivers as independent contractors, and make no reference to employee, worker or agent. The EAT analysed each document, but focused particularly on clause 5 of the Drivers Contract which stated:

“.. you choose the days and times when you wish to offer to provide the Services in accordance with the terms of the Driver Scheme but unless we are informed otherwise, you agree that if you are in possession of and logged into an Addison Lee XDA you shall be deemed to be available and willing to provide Services„.

As referred to in clause 5 above, the drivers are supplied with a hand-held computer known as an XDA. When the drivers are ready to work, they log on to the XDA and it picks up their location and automatically allocates work to them. When a job is allocated to a driver, the driver can either accept the job or provide an acceptable reason for refusal. If the reason is not deemed acceptable, the matter would be referred to the driver’s supervisor, and sanctions possibly enforced.

Due to the obligation placed on the drivers to accept work sent to them through the XDA, the EAT concluded that each driver was working when logged on and should therefore be awarded worker status (and the extended rights that come with it). This decision was made despite the contents of the contractual agreements that repeatedly refer to the drivers as independent contractors.

In the EAT’s submission it referred to the case of Autoclenz Limited v Belcher and the -realistic and worldly wise- approach to be adopted where provisions of a contractual agreement did not, or might not, reflect the true agreement between the parties. This should serve as a warning to employers that having an employment contract that refers to ‘independent contractors’ does not necessarily mean that the working relationship won’t dictate that they are actually workers.

So what does this mean for Addison Lee and other employers?

This decision only immediately effects the three claimants, but it supports the fact that all 3,800 Addison Lee drivers could be legally entitled to fundamental worker rights such as national minimum wage and paid holidays (which it has been reported could cost the taxi firm around £18,000 per employee). Addison Lee commented that they were disappointed with the appeal verdict because they enjoy a positive relationship with the vast majority of their workers.

GMB have urged Addison Lee to accept the decision, but it is unclear as to whether they will follow Uber’s example and exercise their right to appeal to the Court of Appeal. Further to this, GMB have commented that there are (at the very least) 40 further Addison Lee drivers who will be submitting a group claim on similar grounds, and who are likely to now succeed. Whether this will open the floodgates for the remaining 3,800 drives is yet to be seen.

Whatever the outcome of further cases against Addison Lee, this serves as a further example of the building pressure and need for clarity on employment status in the gig-economy.

This article is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice.

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Paul Chamberlain is a Partner and Head of Department located in Manchesterin our Employment department

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