Employment Law Speed Read – 26/11/18
26th November, 2018
In Addison Lee Limited v Lange and others, the Employment Appeal Tribunal affirmed the decision of the Employment Tribunal which found that, contrary to the contractual documentation agreed between the parties, the Claimants were "workers" not independent contractors. Further, when determining an individual's employment status, a Tribunal is entitled to use a "realistic and worldly wise" approach.
The Claimants were private hire drivers who worked for Addison Lee Limited, a professional private hire firm. In order to carry out their role, the Claimants entered into an agreement to hire vehicles from Evantech Limited, a company associated with Addison Lee.
Addison Lee provided its drivers with a hand-held device known as an XDA. When available to work, a driver would log on to Addison Lee’s electronic system using their XDA; if work was available, it would be automatically allocated to the driver. When offered work, drivers were expected to accept it. If a driver refused work, they were required to provide reasons for their refusal and if they failed to provide reasons, a sanction would be imposed.
The contractual documentation agreed between the parties described the Claimants as independent contractors. Further, the contract expressly stated that the Claimants were not under any obligation to provide services to Addison Lee and that they could choose the dates and times that they worked. Although Addison Lee did not promise to provide the Claimants with a minimum amount of work, they were informed that an average driver worked approximately 50-60 hours per week.
The Claimants brought a claim in the Employment Tribunal (ET) disputing their employment status and asserting their entitlement to holiday pay and national minimum wage.
The ET held that contrary to the express wording of their contracts, the Claimants were “workers” not independent contractors. The ET held that once a driver logged on to the XDA, they were required to accept any available work. As such, there was an overarching contract between each Claimant and Addison Lee.
Further, the ET acknowledged that, although the Claimants were free to choose when they worked, in order for Addison Lee’s business model to be fulfilled it must have expected drivers to log on to its systems and perform work. Addison Lee appealed to the Employment Appeal Tribunal (EAT), arguing that the ET had wrongly found that there was an obligation on drivers to do work.
Employment Appeal Tribunal
The EAT affirmed the decision of the ET and dismissed the appeal. The EAT held that once a driver had logged onto the XDA, they were undertaking to accept the work allocated to them. Further, the EAT stated that Addison Lee, as a reputable company, would not encourage drivers to spend a substantial amount of time and money in undertaking training and hiring a vehicle, if it was not going to provide its drivers with a fair opportunity to obtain bookings.
Furthermore, the EAT also held that when determining an individual’s employment status, a Tribunal is entitled to use a “realistic and worldly wise” approach. As such, it was not fatal to the Claimants’ argument that the arrangements between the parties provided the drivers with “a great deal of leeway”.
This case is another example in which an individual who was classed as self-employed was held to be a worker. In May 2018 a cycle courier, also working for Addison Lee, was found to be a worker despite his contract labelling him as an independent contractor.
The case emphasises that the label used to describe the relationship between the parties will not be determinative. Instead, tribunals will adopt a contextual approach, considering how the relationship works in practise when determining an individual’s employment status.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.