The Court of Appeal has denied Addison Lee’s request to appeal an employment tribunal (ET) decision that its drivers are workers, in a ruling that lawyers say could allow thousands of drivers to claim back-pay.
The decision is a direct result of February’s landmark Supreme Court ruling that found Uber drivers were workers and entitled to basic employment rights, including the minimum wage, holiday pay and sick pay, regardless of what was contractually agreed.
As in the Uber case, this decision also means that Addison Lee drivers are considered to be working from the moment they log in to their work devices, and not just for the time when they have accepted jobs.
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Leigh Day, the law firm representing the drivers in the case, has said it believes thousands of Addison Lee drivers could be entitled to an average of £10,000 each in compensation as a result of the judgment. Liana Wood, a solicitor in the firm’s employment team, said the decision was “yet another blow to big firms operating in the gig economy”.
“At Leigh Day we hope that other companies with similar business models to Uber and Addison Lee recognise that they cannot continue to deny people basic rights such as holiday pay and the national minimum wage,” Wood said.
A spokesperson for Addison Lee told the Guardian: “This is a historic case, relating to three drivers who stopped driving for us four years ago.
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“Since then, we have since changed our working practices and the way we engage with drivers to ensure we maintain the flexibility our drivers demand while continuing to provide the best earning opportunity for the highest calibre professional drivers.”
Addison Lee was seeking to overturn a 2017 ET decision that found its drivers were dependent contractors.
This decision was then upheld by the Employment Appeal Tribunal.
The initial ET found that there was an overarching contract between Addison Lee and its drivers. While contractually drivers were free to choose which jobs they took, the “commercial reality” was that drivers were agreeing to work as soon as they logged on to their issued devices.
It also found that parts of the contract between Addison Lee and the drivers, including the requirement that the firm’s branding was displayed on drivers’ vehicles even when they weren’t working, were enforced at all times.
Drivers were also required to pay a regular fixed cost for their vehicle hire, which the ET said “obliges the drivers to log on and drive”. It went on to describe this cost as “the mechanism by which the respondent [Addison Lee] can be close to certain that its drivers will log on.”
The ET also found that drivers met the statutory definition of workers because they were personally agreeing to work whenever they logged onto their device.
The Court of Appeal had initially agreed to hear Addison Lee’s appeal, however reconsidered this decision after the Supreme Court upheld its ruling on Uber.
In its decision, the court said the Uber ruling had “emphatically reaffirmed” the principle that courts should base their judgments in such cases on the legal statute and not the content of contracts, and that where the content of a contract was at odds with the realities of the relationship the court should disregard the contracts.
With this in mind, the Court of Appeal decided that Addison Lee’s appeal no longer had any reasonable chance of success.
Similarly with the issue of working time, the court decided that Addison Lee’s arguments that drivers were only working when then had accepted jobs and not when they logged on were not “innovative” and would not have led to a different conclusion than the one made in the Uber case.
Addison Lee could still choose to appeal to the Supreme Court.
Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed (IPSE), said the ruling was another sign that the government “urgently” needed to introduce clear rules around self-employment.
“This is the true source of the confusion in the gig economy: that while there is a definition of employee and worker status in UK law, there is still no clear definition of who exactly is self-employed,” said Cribb. “We cannot continue in a situation where the only way to define self-employment is through court case after court case.”