In the case of Addison Lee Ltd v Lange & Ors, another recent ‘gig-economy’ case brought against the taxi and courier firm Addison Lee, the Employment Appeal Tribunal (EAT) held that private hire drivers were workers and not independent contractors.

The three Claimants were private hire drivers for Addison Lee. They brought claims against the company asserting that they were workers and were therefore entitled to receive holiday pay and the national minimum wage. 

Addison Lee’s drivers usually hire vehicles from an associated company, which are kept in Addison Lee’s livery. Every driver is provided with a hand-held computer, known as an XDA, which they log into when ready to work. Addison Lee assigns jobs to their drivers through the XDA and the drivers are expected to accept the job unless they have a reasonable excuse for refusing. Whilst logged into the XDA, there is a button for taking a break and a button for when the driver goes home. The drivers can log off whenever they want so long as they are not transporting a customer.

Addison Lee did not promise to provide their drivers with a specific amount of work, however drivers were told that the average driver worked for 50-60 hours per week, and a driver needed to work between 25-30 hours per week to recover the fixed costs of hiring a vehicle.

Each Claimant had to sign two documents: a Vehicle Hire Agreement (VHA) and a Driver Contract. The VHA was made with the associated company that hired the vehicles to Addison Lee. The Driver Contract was entered into with Addison Lee and provided that the driver was an independent contractor and that the agreement did not render him an employee, worker, agent or partner of Addison Lee. In addition, the Driver Contract provided that drivers could choose the days and times when they wished to provide their services and stated that neither Addison Lee or the drivers were under an obligation to provide work or carry it out.

The Employment Tribunal (ET) held that the Claimants were workers, stating that although they are free to reject work and choose when they do it, they are nevertheless undertaking to do work when and as soon as they log onto the XDA system and are then at the disposal of Addison Lee. Therefore, the ET concluded that there was an underlying agreement to offer and perform work.

Addison Lee appealed to the EAT, however the EAT upheld the ET’s ruling.

The EAT held that the ET had correctly concluded that the Claimants were workers by virtue of an overarching contract (the Driver Contract) and because when the Claimants logged on they were undertaking to do work or perform services. The EAT further stated that although the Claimants had a great deal of leeway as to the time and place where they logged on to work, it would be difficult to conclude that either party engaged in these arrangements in the belief that the other undertook no obligation at all. The EAT held that no honest driver would put an employer to certain expenses such as considering his application and training him, unless the driver was committed to undertake some work. Likewise, an honest employer would not encourage its drivers to commit their time and money to training and to the hire of a vehicle if it was not undertaking to provide them with work. Although these obligations were not specified in the Driver Contract, the EAT held that the ET was entitled to apply a “realistic and worldly wise” approach and conclude that the Claimants were workers.

Although the decision only immediately affects the three drivers who brought the case, a similar decision could be made for thousands of Addison Lee drivers across the UK. Addison Lee says it will consider appealing the judgment to the High Court.

This case highlights the importance of looking beyond written employment contracts and examining the true working relationship.

Please contact us if you would like more information about the issues raised in this article or any other aspect of employment law on 029 2034 5511 or employment@berrysmith.com.