Drivers – The importance of work status.

Drivers – Contractors or Workers?

There is a growing body of case law examining the employment status of individuals in the gig economy, including significant rulings involving drivers and well known companies like Uber, Gett, Bolt, and earlier claims against Addison Lee.

The recent claim brought by drivers against Addison Lee Limited revolved around the assertion that the drivers were not independent contractors, as argued by Addison Lee, but rather “workers” within the meaning of Section 230(3)(b) of the Employment Rights Act 1996. The key findings of this case were significantly influenced by the precedents set in the following cases:

Relevant Case Law

1. Uber BV v Aslam & Others [2021] UKSC 5 The Supreme Court held that the drivers (for this tribunal only) were workers, emphasising the importance of the control exercised by Uber and lack of true autonomy on the part of the drivers.

1. Johnson v GT Gettaxi (UK) Ltd [2024] EAT 162 A driver using a black cab app was not a worker for the respondent but was truly self-employed. Note that this was found in favour of the engager, but not this was a ‘black cab’ driver, not a traditional private hire; the driver had no obligation to undertake any work, operated with autonomy, retained the relationship with the passenger, and was not part and parcel of Gettaxi’s business.
2. Bandi & Others v Bolt Operations OU & Bolt Services UK Ltd (2206953/2021 & Others) The Tribunal determined that the sample claimants of drivers were workers, focusing on factors such as the lack of genuine autonomy over accepting jobs and the penalties for rejecting work. Drivers were considered to appear part of Bolt’s business. Those drivers who used multiple applications at once (multi-appers) were not included: they were not economically dependent on one engager
3. Afshar & Others v Addison Lee Limited (3306435/2020 & Others) Claim for couriers found to be workers due to the significant control Addison Lee exercised, including setting delivery schedules and expectations, and the level of integration into Addison Lee’s business.
4. Lange & Others v Addison Lee Limited (2208029/2016 & Others). It was found that drivers were workers because of the drivers’ integration into Addison Lee’s business, Addison Lee’s overarching control, including requiring drivers to accept pre-booked jobs and imposing sanctions for non-compliance.

Findings in the Recent Addison Lee Worker Status Claim

The recent case echoed many of the principles outlined above. The Tribunal identified the following key factors:

1. Control: Addison Lee exerted significant control over drivers, including assigning jobs, dictating routes, and monitoring performance.
2. Subordination: Drivers were required to adhere to Addison Lee’s operational policies and could not negotiate fares or terms with customers.
3. Economic Dependency: Drivers were economically dependent on Addison Lee for their livelihoods, with no genuine ability to operate as independent businesses.
4. Integration: The drivers’ work was integral to Addison Lee’s business model, further supporting the conclusion that they were workers rather than independent contractors.
5. Realistic Assessment of the Relationship: The Tribunal emphasised the need to look beyond the written contracts and focus on the practical realities of the relationship, following the guidance from the Supreme Court in Uber BV v Aslam.

Ruling:

The Tribunal ruled in favour of the claimants, finding that they were workers and, therefore, entitled to rights such as the national minimum wage, holiday pay, and protection from unfair treatment.

Bishopsgate recommends:

The cumulative impact of these cases makes it clear that private hire operators need to carefully consider their operating models to mitigate the risk of future claims and ensure a defendable position if challenged by HMRC or drivers. This includes:

1. Review Contractual Arrangements: Ensure that contracts reflect the actual working relationship and avoid misleading language suggesting independence where it does not exist.
2. Reassess Control Mechanisms: Reduce the level of control over drivers to bolster arguments of genuine self-employment. This includes limiting the use of driver handbooks or guidelines, carefully assessing recruitment and onboarding practices.
3. Implement Flexible Systems: Allow drivers to negotiate fares, accept or reject work without penalty, and have greater autonomy over their schedules.
4. Transparency and Communication: Clearly communicate with drivers about their rights and obligations to avoid disputes and foster goodwill.

Engaging with Bishopsgate by proactively addressing these issues, you can reduce legal risks and ensure you are well-prepared should you need to defend your business.