The Employment Appeal Tribunal has rejected Addison Lee’s attempt to overturn a judgment by the Employment Tribunal which found that one of the company’s 500 cycle-couriers was entitled to basic employment rights. [1] See Addison Lee Ltd v. Gascoigne (WORKING TIME REGULATIONS – Holiday pay) [2018] UKEAT 0289/17/1105.

Thanks to Rachel Farr of Taylor Wessing for drawing this to my attention:

 

The EAT’s decision is yet another example of gig economy litigation in which the Tribunals have looked past the written words of the contract to examine the real working arrangements between the parties.

Employment lawyers and their clients expect further developments in this area, with decisions from the UK Supreme Court in Pimlico Plumbers and the Court of Appeal in Uber to follow soon.

Background

The claim concerned 1 weeks’ holiday which the Claimant took but was not paid for. The Claimaint brought a claim in the Employment Tribunal which Addison Lee defended on the basis that the Claimant was not a ‘worker‘ entitled to basic employment rights such as holiday pay, but an independent contractor in business on his own account.

RELATED: Addison Lee drivers win claim for minimum wage and holiday pay

As proof of the Claimant’s arms-length relationship, the company relied on the terms of his contract, which included:

  • Declarations that the Claimant was not an ’employee’ or a ‘worker’ and that Addison Lee was simply an agent for the couriers;
  • A ‘zero-hours‘ clause putting no obligation on either party to offer or perform any work;
  • A promise by the Claimant to pay Addison Lee’s legal costs should he dispute his employment status (ie. an indemnity).

RELATED: Watch my vlog on zero-hours contracts

The Employment Tribunal judgment

Employment Judge Wade rejected the company’s arguments and evidence. She found that the Claimant had to be willing and available to work within central London when he was logged on and at these times he was subject to the employer’s control (§ 53). He was not running a business of his own and Addison Lee took measures like protecting the couriers from non-payment, which it did not have to take if they were genuinely independent.

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The appeal

Addison Lee appealed to the EAT on two grounds. Firstly, there was no basis to conclude that the Claimant was under an obligation to accept jobs once logged on. This was a purely ‘zero-hours’ contract with no mutuality of obligation. Secondly, the company argued that the Tribunal got its facts wrong by relying on the Claimant’s evidence where it should not have done so.

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

On 11 May 2018, Mr Justice Soole, presiding in the EAT with two lay members, dismissed the company’s appeal entirely.

On Ground 1, the EAT concluded that during the period that the Claimant was logged on, there was a contractual relationship with identifiable obligations to offer and receive work (§ 33). Just because a courier could log off at any time, that did not defeat the obligation to accept work when logged on.

Dusting-off an infrequently cited case about garment workers in the 1980s (Nethermere (St Neots) Ltd v Gardiner [1984] I.C.R. 612), the EAT explained that the mutual obligation to provide and accept work can arise from established practice and the expectations of the parties, even in what was apparently a ‘zero-hours’ contract (§§ 34 and 35).

On Ground 2, the EAT rejected the company’s attempts to overturn various other factual findings by the Tribunal as ‘minute dissection’ of the evidence heard and arguments based on ‘semantics’ rather than substance.

Conclusion

Much like Uber’s Tribunal appeal before it, Addison Lee faced a challenging task in overturning the highly fact-sensitive findings of the Employment Tribunal. The EAT’s point that a zero-hours clause may not always faithfully reflect the reality of the working relationship is a useful one to bear in mind for employers and those employed by them. Caution should be exercised by any employers seeking to rely on zero-hours clauses if, in practice, persons employed are expected and expecting to perform certain amounts of work.

[1] The claim was for holiday pay under the Working Time Regulations 1998 and the Employment Rights Act 1996.

Posted by Ben Amunwa

Founder and editor of Lawmostly.com. Ben is a business and public law barrister with the 36 Group. He gives expert legal advice on employment, immigration and commercial disputes to a wide range of clients.

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