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Employment Appeal Tribunal Confirms that Private Hire Drivers are Workers, Using a “Realistic and Worldly Wise” Approach to Determining Employment Status

The Employment Appeal Tribunal (“EAT”) has upheld the decision in Addison Lee Ltd v Lange & others [2018] that private hire drivers were workers and not independent contractors for the purposes of the Employment Rights Act 1996 (“ERA 1996”), Working Time Regulations 1998 (“WTR 1998”) and the National Minimum Wage Act 1998 (“NMWA 1998”).

Mr Lange and his two colleagues worked as drivers for Addison Lee Limited (“Addison Lee”) under contracts which described the driver as “an independent contractor”. Addison Lee provided the drivers with induction, training and documentation as to how they should do the job. Drivers often hired vehicles from an associated company of Addison Lee, and were given hand-held computers which allocated jobs to them when they logged on.

The drivers were not promised specific amounts of work but were told that in general they could expect to work around 50 to 60 hours a week. If a driver did not accept a job, they had to provide an acceptable reason, otherwise there was a risk that they could face sanctions. Drivers could log-off whenever they wanted, provided that they were not transporting a customer.

An employment tribunal, applying the “realistic and worldly wise” approach established in Autoclenz, held that Mr Lange and his colleagues were workers within the meaning of the ERA 1996, WTR 1998 and NMWA 1998. They were not self-employed independent contractors and the contracts in place did not properly reflect the true agreement between the parties. The tribunal also held that when the drivers were logged on to the Addison Lee system, this constituted working time.

Addison Lee appealed the decision and argued that the tribunal had erred in its conclusion that Mr Lange and his colleagues had an obligation to perform work and disputed that the drivers being logged in to the system constituted working time.

The EAT dismissed the appeal, confirming that the drivers were in fact workers under the relevant legislation. The EAT also confirmed that the definition of “working time” was satisfied when the drivers were logged on to Addison Lee’s systems. Being available when logged on to the system was an essential part of the service offered to Addison Lee.

The EAT held that the tribunal was entitled to reach the conclusion it did, based on the “realistic and worldly wise” approach. This confirms that an employment tribunal will look at the reality of a working relationship when determining employment status, and that it is open to the tribunal to disregard any labels that the parties may have stated in contractual documentation.

This bulletin is for general guidance purposes only and should not be used for any other purpose.

Brabners is a Limited Liability Partnership