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Addison Lee - the London-based private hire cab and courier company - could soon be paying out to thousands of their drivers with each being entitled to around £10,000 in compensation. This comes following the dismissal of their application to appeal against the rulings of the Employment Tribunal (ET) and Employment Appeal Tribunal (EAT).
In a similar situation to Uber, Addison Lee claimed that the drivers were independent contractors and not workers - this was reflected in their contracts.
By classifying their drivers as independent contractors the drivers would not be entitled to rights such as National Minimum Wage, protection against unlawful deductions from wages and paid holiday. However, the Court of Appeal found that the drivers were workers. A key takeaway from this case is that it is yet another example of why you can’t just rely on the wording in the contract.
The Court of Appeal agreed with the previous findings of the ET and EAT despite clear wording in Clause 5.4 of the Addition Lee drivers’ contracts which said that “there is no obligation on you to provide the Services to Addition Lee”. This did not reflect what was really happening. In reality drivers who refused an allocated job could be sanctioned. This is inconsistent with an unfettered right to refuse work that you might otherwise expect with a true independent contractor.
The decision by the Court of Appeal has a direct impact on Addison Lee, but there is clearly a wider concern for anyone engaging individuals in the gig economy. Cases like Uber and Addison Lee are just two of many cases that will no doubt strengthen the call for enhancing employment rights in the gig economy.
The outcome to any further cases will be highly fact-sensitive, and, as we mentioned previously when covering the Uber case, the importance of correctly assessing the status of self-employed contractors cannot be understated.
Are we seeing a Government response to these types of cases?
On 21 April 2021 the House of Lords Select Committee on COVID-19 published Beyond Digital: Planning for a Hybrid World. Perhaps unsurprisingly given the outcome of the Uber and Addition Lee cases, the report recommends the introduction of “new legislation to give platform workers defined and enhanced employment rights”.
Clearly this is an area that will continue to evolve and businesses will need to be alive to the changes to limit the risk of litigation. It will be particularly important for businesses to be conscious of employment status with the introduction of IR35, some people might consider this the perfect storm.
Crucially in this case, although EJ Anderson found in favour of the employer, she did make clear that in principle the health and safety protection under the Employment Rights Act can apply to the pandemic, and each case will turn on its own facts. Employers should therefore exercise caution before dismissing an employee who refuses to return to work in similar circumstances. Appropriate COVID measures taken in the workplace will be key, as will be considering exactly what concerns the individual raises and how these are addressed.