Case law: A further employer is told its ‘self-employed’ contractors are workers and entitled to basic employment rights

Businesses which generate and pass work to third party individuals to carry out, treating the individuals as self-employed, should consider whether they are actually ‘workers’ under UK law and entitled to basic employment law rights, following an Employment Appeal Tribunal (EAT) ruling.

A private hire firm used drivers to provide taxi and transport services to private and business customers. The drivers used the firm’s vehicles which carried the firm’s branding. They would log onto the firm’s IT system from their vehicles using a hand-held device. Jobs would then be allocated to them, and the drivers had to indicate immediately whether or not they accepted the job by pressing a button on the device.

If a driver failed to respond immediately or rejected a job without giving an acceptable reason, they could be sanctioned. Initially, their controllers vetted the reasons given, and if a controller did not think a particular reason was acceptable, the matter was referred to a supervisor.

There were written agreements with each driver stating that they were self-employed contractors, not employees or workers.

However, the drivers claimed that they were ‘workers’ and therefore entitled to basic employment rights, such as holiday pay and the national minimum wage. They also argued that they were working the whole time they were logged onto the firm’s system, even when not actually on a job, for the purposes of the working time rules/national minimum wage. The employer said the written agreements meant the drivers did not have these rights.

The Employment Appeal Tribunal (EAT) agreed with the drivers, saying that the Employment Tribunal had applied the right ‘realistic and worldly wise’ test used in previous rulings. According to that test, it is appropriate for a court or tribunal to decide whether the terms of a written agreement represent what was actually agreed by the parties and, if not, to glean the true agreement from all the circumstances of the case, taking into account the relative bargaining power of the parties.

Applying that test, the drivers were workers and entitled to basic employment rights as claimed. The EAT also ruled that time spent logged onto the device was all working time for which the drivers must be paid. Being available – ie logged on – was an essential element of the service the drivers were providing to the firm.

Operative date

  • Now

Recommendation

  • Businesses which generate and pass work to third party individuals to carry out, treating them as self-employed, should consider whether they may in fact be ‘workers’ under UK law and entitled to basic employment law rights, following the latest ruling on this issue

Case ref: Addison Lee Ltd v Lange & Ors [2018] UKEAT 0037_18_1411

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