Barely a week goes by without worker status finding its way back into the headlines. The EAT this week upheld a tribunal's decision that three private hire drivers engaged by Addison Lee, which offers various transport services, are workers. The EAT confirmed the tribunal's ability to look beyond the contract in place to the reality of the working arrangements and endorsed the adoption of a "realistic and worldly-wise" approach.
The drivers sought to establish worker status in order to succeed with claims for national minimum wage and holiday pay. Addison Lee's drivers generally hire a vehicle with Addison Lee livery from an associated company. Drivers are given a handheld device which they log into when they wish to work. Through that device they are assigned jobs according to location. If a driver is assigned a job, they are expected to take it. If they refuse, they must give an acceptable reason or face sanctions for doing so. The contracts between Addison Lee and its drivers state that the drivers are independent contractors and that there was no obligation to offer or accept work. Addison Lee does not guarantee a certain amount of work but drivers are told that the average driver works 50-60 hours per week. In reality, to cover the vehicle hire costs, they only need to work between 25-30 hours per week.
The tribunal accepted the drivers' argument that there was an overarching agreement between each of them and Addison Lee providing for mutual obligation to offer and perform work, despite the terms of their contracts. Given the costs involved in the vehicle hire, the drivers were economically obliged to log on and earn money. The tribunal found there was a realistic expectation of being offered work when the drivers logged on. It went on to find that, even if they were wrong about there being an overarching agreement, once they were logged on, they were personally obliged to work, which was enough in itself to make them workers. In a further blow to Addison Lee, the tribunal determined that drivers were working during the entire time they were logged on (except break times).
The EAT dismissed Addison Lee's appeal. It found that this was the type of case referred to by the Supreme Court in Autoclenz Limited v. Belcher, where a tribunal has to investigate whether the written contract reflects the actual terms agreed. The Supreme Court commented that the tribunal must be "realistic and worldly-wise" when it does so. As a result, the EAT found the tribunal was entitled to reach the conclusions it did.
This is simply the latest in a line of cases where worker status has been established by those engaged in the gig economy. It is a further reminder, if it were needed, that the wording of a contract offers a company no protection if it does not reflect what happens in reality. If you wish to engage a flexible workforce then it is critical to examine how the arrangements work in practice and assess employment status realistically at the outset.
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
