The so called ‘gig economy’ has seen a host of cases before the Employment Tribunal in recent times, the key question being whether the individuals engaged are self-employed contractors or workers.
Self-employed contractors have no employment rights, whereas workers are entitled to be paid the National Minimum Wage and holiday pay amongst other things.
Recent case law demonstrates that the Tribunals are unlikely to agree that individuals are self-employed where they are presented to the outside world as an integral part of a fleet, rather than as independent businesses in their own right.
There have been a number of first instance decisions, where the Employment Tribunal has found that cycle couriers for Addison Lee, Cityspint and Excel Group Services were all workers, and it has been difficult to avoid the much publicised decision that an Uber driver was classed as a worker. The Court of Appeal also found that a plumber engaged by Pimlico Plumbers was a worker rather than self-employed. While 3 of those cases are currently subject to appeals, the approach being taken by the Employment Tribunal is clear.
The most recent case to be determined involved individuals engaged by Addison Lee as private hire taxi drivers. The Employment Tribunal found that 3 drivers were workers and should therefore receive the minimum wage of £7.50 per hour, as opposed to the £5.00 actually being earned. Addison Lee reportedly has 3,800 drivers on its books and it is estimated that this decision, which equates to about £4,000 per worker, could cost them more than £15M in back pay. Given the implications of the decision, we expect Addison Lee to appeal.
It is important to be aware that while classification as a worker affords some employment rights, it is not the same as being an employee. An employee is entitled to additional protection such as the right to claim unfair dismissal, and entitlement to redundancy payments (subject to satisfying qualification criteria).
Solicitor, Employment & HR at Berry Smith Lawyers
If you would like further information on worker status, or more specifically the implications of the Addison Lee decision, please don’t hesitate to get in touch with firstname.lastname@example.org or any of Berry Smith’s employment team on 029 2034 5511.