Addison Lee drivers win claim for minimum wage and holiday pay

A group of drivers for the private cab company Addison Lee have won a test case in the Employment tribunal for basic employment rights, affecting approximately 4,000 drivers in London alone.

Introduction

This test case was slightly overshadowed by Uber’s appeal in the Employment Appeal Tribunal and, before that, Transport for London’s decision to revoke Uber’s private hire licence.

But the Addison Lee case expands an important body of law on the ‘gig economy’, particularly because their drivers clocked in and out via an online app, like many other disruptive internet platforms operating in the casual labour market.

The claims

The Claimants were 3 drivers who brought claims for holiday pay and for the national minimum wage. The company denied that the Claimants were ‘workers’ and that it was impractical to calculate the periods of time they should be paid for.

RELATED: #UberAppeal: app argues its drivers aren’t ‘workers’ in latest gig economy legal battle

The Tribunal waded through a mass of evidence about how the company worked in practice and some of the main points are distilled below.

The facts

Addison Lee drivers hire their vehicles from an associated company. The drivers signed contracts for the work and a separate contract for the vehicle. The Tribunal found that the drivers would need to work 25 to 30 hour weeks in order to pay the fixed costs of the vehicle.

The contract, like many similar documents in the casual work sector, described the drivers as self-employed, independent contractors, responsible for their own tax and VAT liabilities. The wording also specifically excluded them from the protections afforded to ‘employees‘ and ‘workers’.

The drivers choose their hours of work. However, if they are logged on to the app the company assumed they are available and willing to work. There was no contractual obligation on the drivers to perform any work, or for Addison Lee to provide any work to them (also known as a ‘zero-hours’ clause).

That said, drivers allocated a job had to accept it immediately or face potential sanction. In addition, there was reference to shifts and serious punishment for failing to attend pre-bookings. Drivers who did not work more than a minimum amount would be fined a weekly ‘service charge’.

The company puts drivers through “Knowledge School” and lays emphasis on a recruitment and training procedure. The drivers also had to abide by standard guidance on conduct. This includes the wonderfully bureaucratic line:

To avoid misunderstandings and problems, please do not engage in conversations about sex, politics, religion or anything controversial.

A dress code (‘no trainers’) was also the forms of control imposed by the company. There was a range of sanctions and penalties used to keep drivers in check, and spot inspections of both vehicles and drivers.

The fare was set by the company and no further negotiation was allowed.

[As an aside, Uber, in its recent Tribunal appeal, tried to distance itself from the Addison Lee case, claiming that there were multiple differences between the two companies and their relationship with their drivers. 

Uber drivers have no uniform, don’t display the brand. Contrast with Addison Lee. There’s also no oblign on drivers to use app – Uber lawyer

— Ben Amunwa (@benamunwa) September 27, 2017

We are yet to see whether Uber’s approach succeeds.]

The Employment Tribunal’s conclusions

The Tribunal concluded that the drivers were ‘workers’.

The legal discussion raised the following issues:

(1) Is there a contract?. This may also involve identifying any ‘overarching contract’. (2) Does the individual work for the other contracting party? (3) If so, is s/he obliged to perform the work personally? (4) Is the other party a customer of a business undertaking carried out by the putative worker? (5) If not, the individual is a worker. (§ 41)

On issues (1) and (2), the Tribunal concluded that the drivers worked for Addison Lee within an overarching contract. The lack of any obligation on the drivers to log on was not fatal to their case, rather, it was simply one factor to be considered. All that is required is “some obligation” on the person to work and “some obligation” on the business to pay for it (§ 45).

The commercial reality was that the company recruited drivers, trained them, leased vehicles to them at a weekly charge, controlled their conduct and their use of the vehicle and therefore the drivers were undertaking to perform work when they logged on, if only to cover costs. In the words of the Tribunal:

Addison Lee needs them to log on; and they need to do so to pay the overheads and start earning money… It is a symbiotic relationship.

On issue (3), when the drivers logged on, they were agreeing personally to accept the jobs given to them (§ 50).

On issue (4), the drivers were not in business on their own account. They had to hire cars from companies associated with Addison Lee in order to work at all. They were not free to use the vehicles to earn other sources of income. They didn’t market themselves as independent businesses nor did they treat Addison Lee as one of a number of clients. The drivers only worked for Addison Lee (§ 51).

The contractual documents reflected a significant inequality of bargaining power. The level of subordination was far more than one would expect between two independent businesses.

On the question of when a driver is ‘working’ for the purposes of the Working Time Regulations, the tribunal concluded that the period of time starts when the driver logs on and is not on a break, regardless of whether they were driving a passenger at the time.

The Tribunal parked the issue of how the Claimants’ holiday entitlement should be calculated, pending the parties written submissions on the point.

Summary

I’ve said it before, but it bears repeating. The struggle between employers and their workforces over basic employment rights is inseparable from the power dynamics between them.

The message from the Courts is that employers must accept that if they want their workforce to be classed as self-employed and not entitled to a range of rights, they need to treat them as genuinely self-employed individual businesses. No more uniform branding, vetting, training, conduct manuals or sanctions for non-compliance. An unruly mass of independent freelancers – that’s what genuine self-employment looks like (and I’m speaking from experience here!).

Fortunately for the drivers in this case, their working arrangements were nothing of the sort.