Summary

Addison Lee, the London-based minicab and courier company, recently lost two cases in decisions that echo the "gig economy" rulings against the likes of Uber, Excel, City Sprint and Pimlico Plumbers. The claims against Addison Lee both hinged on the legal distinction between "independent contractor" and "worker". In both instances, Addison Lee unsuccessfully argued that the claimants were the former and, therefore, not entitled to holiday pay or the national minimum wage.

Issues

In the case of Gascoigne v Addison Lee Ltd (August 2017), Mr Gascoigne (a cycle courier who worked for Addison Lee for nine years) claimed that he was a worker and, as such, was entitled to holiday pay following a week's holiday. Supporting Mr Gascoigne's argument was the fact that his workload was directed by a "controller", who allocated jobs and tracked him via GPS and radio. The controller would allocate jobs on a piecemeal basis and it was expected that Mr Gascoigne would wait in an allocated area on standby throughout his shift. There was no ‘decline’ button available on his system; instead Mr Gascoigne would instead have to contact the controller directly to refuse a job. Although it was expected that Mr Gascoigne would carry out his work personally, if he did refuse a job another Addison Lee courier would be assigned to it. Mr Gascoigne was also provided with various items of technology by Addison Lee, as well as branded materials including bags and t-shirts.

Similarly, in Mr M Lange (and others) v Addison Lee Ltd (September 2017) a claim was brought by three Addison Lee minicab drivers. The drivers in this case also argued that they were workers and, as such, were entitled to holiday pay. In addition, they argued that they had each earned the equivalent of £5 an hour throughout their time with Adison Lee, being £2.50 below the National Minimum Wage of £7.50.

The drivers in this case were subject to a detailed manual with strict performance standards and rules. Whilst under no obligation to log on to Addison Lee's system and accept jobs, there was an expectation that the drivers would work regular and long hours. Drivers who failed to meet the performance standards could also suffer penalties. Whilst with Addison Lee, the drivers did not work for any other minicab businesses; indeed, the contract they signed precluded them from carrying out taxi work for any other company. As in the case of Mr Gascoigne, the drivers were directed by a controller and could not begin a journey without their express authority. They also had to wear Addison Lee branded clothing and their cars were branded with the company logo.

Decision

In both instances, the Employment Tribunal ruled that Addison Lee had been wrong to classify the drivers as independent contractors – they were in fact workers and entitled to essential workers’ rights, including the right to be paid the National Minimum Wage, receive holiday pay and not have their contracts terminated because they were members of a Trade Union.

The Employment Tribunal reached this decision despite the fact that documentation the drivers had signed with Addison Lee expressly stated that they were self-employed independent contractors. In reaching its decision, the Tribunal demonstrated a willingness to disregard any clauses in the documentation that did not match the reality of the working relationship.

What does this mean for employers?

These were both significant decisions, and will no doubt affect thousands of individuals working in the gig economy across the UK. The rulings also follow hot on the heels of the Taylor Review, a government-backed investigation into the gig economy which suggested, amongst other things, that workers should be renamed “dependent contractors”, so that deeper clarity would be given to the status of people such as couriers.

For businesses, these decisions serve as a warning that Tribunals are willing to take a microscope to working practices in order to challenge employment status. As such, employers will need to take great care and carefully consider how they classify their staff moving forward. Together with other recent judgments on this issue, these cases may also represent only the start of a wave of claims around employment status, particularly in light of the recent Supreme Court ruling abolishing tribunal fees.

It is also worth noting that the decision in Mr M Lange (and others) v Addison Lee Ltd could have significant implications for Uber's ongoing appeal against the ruling that its drivers are to be classified as workers. Uber has sought to defend its employment practices by arguing that it operates a model that is "closely analogous" to that of most minicab firms. However, that argument is going to be less attractive for them in light of these decisions.