Employment Tribunal rules that Addison Lee drivers are workers

In Mr Lange and others v Addison Lee Limited, a test case which potentially affects thousands of other Addison Lee staff, the Employment Tribunal has ruled that three drivers are workers rather than independent contractors as stated in their contracts. This means that they are entitled to paid holiday and the national minimum wage.

The Employment Tribunal rejected Addison Lee’s defence that its drivers are self-employed, in effect each running a small business, and that they could not be workers because they are free to choose when to work.

The Tribunal held that the drivers are not in any realistic sense contracting with Addison Lee as a client of their own business. As the contractual documents demonstrate, in practice the drivers are in a subordinate position and have little bargaining power. The following factors were relevant to the Tribunal’s decision:

• all but one of the 3,800 drivers in London hire their vehicle, with company branding, through a company associated with Addison Lee;
• drivers have to work 25 to 30 hours a week to cover the hire costs;
• drivers undertake a comprehensive recruitment, induction and training programme;
• once logged into the company’s booking system, drivers have to accept jobs allocated to them otherwise they could face disciplinary action;
• drivers have to comply with the company’s dress code and code of conduct;
• drivers have no control over fares; and
• drivers have to undertake a minimum amount of work per week otherwise they receive a £35 weekly service charge.

The Employment Tribunal concluded that drivers are ‘working’ for the purposes of accruing holiday and the national minimum wage during the period when they are logged on to Addison Lee’s internal driver portal system.

This is another high-profile case dealing with employment status which is a reminder of the consequences of classifying staff as self-employed when, in reality, they are workers. As in the previous Uber and CitySprint cases, the Tribunal was prepared to look beyond the detailed written documentation and the labels applied by the employer to the employment relationship, in order to assess how the working relationship between the drivers and the company operates in practice.

It should be noted that we are awaiting the outcome of Uber’s recent appeal in the Employment Appeal Tribunal (EAT), where Uber suggested that the Employment Tribunal had gone too far in looking at the commercial reality of its relationship with its drivers rather than properly analysing the detailed written terms. Uber argued that it uses essentially the same model traditionally operated by minicab companies, acting as an agent of its drivers in booking work on their behalf and charging them a fee or commission. Uber also emphasised that there is no mutuality of obligation because its drivers are under no contractual obligation to accept work and can turn their app off at any time. It seems likely that the EAT’s decision in this case will also be subject to further appeal.