Valerie Bond
Posted on 6 May 2021

Employment Status – case update

Following the Uber case earlier this year, which found that Uber drivers are workers, similar such cases are now coming to light. The most recent is that of Addison Lee v Lange & Ors UKEAT/0037/18/BA in which the Employment Appeal Tribunal found that the Addison Lee drivers qualify as workers under the Employment Rights Act 1996.

Employee, worker, or self-employed?

There are various tests that can help determine whether an individual is an employee, worker, or self-employed.

"Employee" has various definitions within the relevant legislation, but none of these are particularly comprehensive, and have given cause for the courts to develop further ways in which to identify an individual with employee status. Broadly speaking, the legislation itself describes an employee as an individual who works under a contract of employment or contract of service.

"Worker" is a hybrid status, midway between an employee and a self-employed person. It is intended to recognise a category of individual who, whilst not an employee, is not fully independent and, therefore, should be afforded some legal protection. The legislation defines a worker as an individual who has entered into:

  1. a contract of employment; or  
  2. any other contract (expressed or implied, oral or in writing), where the individual undertakes to do or perform personally any work or services for another party.

Part b) of the definition has caused some debate over the years. Employment Tribunals have tried to determine what types of working arrangement fall within its scope, when the definition is remarkably similar to that of an employee.

No definition of self-employment is provided within employment legislation, which does not help to clarify the situation. However, it is generally accepted that someone who is self-employed is an individual who has no contract of employment or contract to undertake work personally.

The now fairly long-standing case of Ready-Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] set out the key components for consideration when assessing employment status, as follows:

  1. Personal service – did the individual undertake to provide their own skill and work?
  2. Mutuality of obligation – did the individual agree to provide their own skill and work in return for a wage or other remuneration?
  3. Control - was there a sufficient degree of control to enable the individual to be called a "servant"?

The categorisation of an individual's work with a company is central to their rights and benefits. A worker shares many of the same rights as an employee but does not usually enjoy the benefit of Statutory Sick Pay, for example. Those who are categorised as self-employed do not attract any such protections – their contractual engagement does not require payment of the National Minimum Wage; neither are they entitled to be paid for any annual leave they may take.

The rules and regulations surrounding employment status are complicated enough, but with the rise of the "gig economy", this new brand of flexible and casual work has meant that the deficiencies and confusions of the law in this area are becoming ever more prevalent. In the case against Uber, the Claimants alleged that Uber had failed to pay them the National Minimum Wage or make any payments during annual leave. The claim was brought by the Claimants on the basis that they were workers, rather than self-employed individuals. Uber argued that there was no contract with the drivers and so they were not workers and, as such, not entitled to paid leave.

As covered in our previous article, Supreme Court Ruling – Uber drivers are workers, the Supreme Court found that the drivers were workers and were entitled, therefore, to national minimum wage, holiday pay and other rights such as whistleblowing protection.

Addison Lee Ltd v Lange and others UKEAT/0037/18

The case is similar to that of Uber in that the Employment Appeal Tribunal ('EAT') was asked to consider whether or not the Adison Lee drivers were workers, despite their contract describing them as self-employed.

Addison Lee provides private-hire taxis and a courier service. Drivers are provided with induction, training and documentation setting out how they should carry out their job. Drivers often also hire the vehicles from a company associated with Addison Lee.

The EAT held that there was an overarching contract between the parties. Similar to the Uber decision, it was held that the drivers were workers whenever they were logged on to the Addison Lee app. Most drivers will only work for Addison Lee and will therefore be on standby to deliver for large periods of time (usually being expected to work for around 50-60 hours a week).

The EAT held that there was a clear inequality of bargaining power between the parties, with the drivers in a subordinate position. Drivers had to accept any jobs assigned to them and if they did not, they had to give an acceptable reason for refusal and a sanction could follow from such a refusal. All these factors pointed towards worker, rather than self-employed status.

Comment

Since the decision by the Supreme Court in relation to Uber, it is likely that we will be seeing a larger number of claims such as this coming to the foreground. Furthermore, it will also put into question the employment status of various individuals currently working within the so-called "gig-economy".