Worker Status: Addison Lee taxi drivers are workers

The definition of “worker” for the purposes of working time and national minimum wage legislation includes individuals working under contracts of employment.  It also includes individuals working under any other contract, whether express or implied, where they undertake to perform work personally for another party to the contract who is not a client or customer of any profession or business undertaking carried on by the individual.  These kinds of workers are sometimes referred to as “limb (b)” workers.  In this case, the EAT considered whether three Addison Lee drivers were limb (b) workers, so that they could bring claims against Addison Lee for holiday pay and the national minimum wage.  Mr Lange and his colleagues worked as taxi drivers for Addison Lee.  Drivers almost invariably hired a car, with Addison Lee branding, from Eventech, an associated company of Addison Lee.  Each driver was given a hand-held computer known as an XDA, which they used to log onto the computer system and was used to detect the location of the vehicle so that jobs could be allocated. Drivers were expected to accept jobs straight away when they were logged in.  If they did not accept a job, they had to give an acceptable reason.  Unacceptable reasons might result in a sanction against the driver.  The drivers had to use the XDA to notify when they were taking a break and when they were going home, which they could do after they had been logged on for four hours.   Addison Lee did not promise to provide drivers with a specific amount of work, but they were told that they could expect to work 50 to 60 hours a week.    Each driver signed a vehicle hire contract with Eventech, paying a deposit and weekly rental fee, and the driver agreed that the rental fee could be paid out of the driver’s earnings.  The drivers also entered into a contract with Addison Lee, which described the driver as an “independent contractor” and stated that nothing in the contract would render them an employee, worker, agent or partner of Addison Lee.  The contract provided that the driver could choose the days and times they would be available but there was no obligation on Addison Lee to offer work or on the driver to accept it when offered. However, the driver would be deemed to be available and willing to provide work at any time that they were logged into an XDA. The employment tribunal held that Mr Lange and his colleagues were limb (b) workers, and that when they logged onto the XDA, this was working time.  Addison Lee appealed to the EAT. The EAT agreed with the employment tribunal in relation to both points.   The key issue for the EAT in the appeal was whether the drivers undertook to perform any work or services for Addison Lee.  The EAT agreed with the tribunal that there was an overarching contract between the parties whereby the drivers were undertaking to do some driving work.  Following established case law, the EAT said that the tribunal had correctly decided that the terms of the written agreement between the drivers and Addison Lee did not reflect the true agreement, and that the tribunal had been correct to glean the true agreement from all the circumstances of the case.  These circumstances included the fact that drivers who refused an allocated job might be sanctioned: this is not consistent with an unfettered right to refuse work.  If there were an unfettered right to refuse work, the EAT said it would be difficult to see how Addison Lee could operate at all.  There was an obligation on the drivers to perform work, and the drivers did not work merely as a result of the pressure of market forces or commercial imperatives.  The EAT also agreed with the employment tribunal that, even had there not been an overarching contract, during periods when the drivers were logged onto the XDA, they were workers.  
What does this mean for employers?
The EAT’s findings are consistent with its findings on the employment status of its cycle couriers and with the general direction of travel in cases about worker status.  It is possible that, once the Government’s current consultation about employee status has been completed, legislation will be implemented to increase clarity on this difficult and important issue.  Addison Lee v Lange and others