News & Insights

Is the gig up?

Christian Meredith reports on an employment status case that considered whether drivers for a taxi company were in fact workers.

The Employment Appeal Tribunal (EAT) recently heard a case that sought to determine whether drivers of a private-hire taxi company were workers or self-employed independent contractors. This is another case in a series based on employment status that has gained considerable attention.

The case concerned Mr Lange and two colleagues who worked as drivers for a private-hire taxi company, Addison Lee Limited (AL).  AL provides private-hire vehicles, as well as a courier service, offering drivers an induction, training and documentation. Drivers also receive instruction and guidance on how they should carry out their work. They are also given computers (known as an XDA) which allocates jobs to them whenever they are logged in. Once the XDA has allocated a job the drivers are unable to refuse them and if they do sanctions are imposed.

Contractually the drivers were described as independent contractors. The contracts also stated that there was no obligation on AL to offer work or for the drivers to accept it when offered.

Mr Lange and his two colleagues brought claims to the Employment Tribunal (ET) stating that they were workers. It was established at the ET that, under the meaning of worker in the Employment Rights Act 1996, they were not genuinely self-employment independent contractors. Further the ET found that when the drivers were logged on to XDA this constituted working time. AL appealed the decision.

The EAT rejected AL’s appeal and were satisfied that the ET had applied the definition of worker correctly. The definition of ‘working time’ was also satisfied when drivers were logged on to XDA as they were constantly at AL’s disposal when logged in and being available is an essential part of AL’s service.

The gig economy still presents murky waters for companies wishing to engage services in this manner. The Taylor Report recommended that this area needs further clarity and explanation around it. The Government agreed with the report’s conclusions, so it is likely that this issue will be addressed in more detail soon. In the meantime, companies should consider the status of their workers and contractors and make sure they have the appropriate contracts in place.