Publish date

28 July 2023

The importance of correctly establishing employment status – United Taxis Ltd v Comolly

The case

The Employment Appeal Tribunal (EAT) has confirmed in the recent case of United Taxis Ltd v (1) Mr R Comolly (2) Mr R Tidman [EAT] EAT 93, that it is not possible for an individual to be an employee or worker of two different employers at the same time in respect of the same work. The EAT commented in the case that ‘dual employment’ was a problematic concept, and that it could lead to inherent difficulties in terms of obligations and responsibilities. In a broader sense, the case serves as a reminder of the importance of having regard to the reality of the relationship when it comes to considering the employment status of an individual, rather than how they may have been labelled under their contract of employment.

In this particular case, Mr Comolly was a taxi driver who drove passengers of the taxi company United Taxis as his form of income. This was facilitated through an agreement between Mr Comolly and one of the shareholders of United Taxis, Mr Tidman. Mr Comolly used Mr Tidman’s taxi to carry out his work and drive passengers. The agreement between Mr Tidman and Mr Comolly was possible because each shareholder of United Taxis, of which there were multiple, paid a subscription fee in order to register vehicles and gain access to the work provided by United Taxis.

After the relationship between Mr Comolly and Mr Tidman ended, Mr Comolly brought various complaints to the Employment Tribunal, including unfair dismissal, age discrimination and unpaid wages. Within these complaints, Mr Comolly claimed that he was either an employee or a worker of United Taxis or Mr Tidman. As a worker, he would still be entitled to make a discrimination claim, even if he was not an employee. At first instance, the Tribunal ruled that Mr Comolly was a worker of United Taxis and an employee of Mr Tidman. They considered that, firstly, Mr Tidman had a contract with United Taxis under which he worked and that United Taxis exercised an element of control over how Mr Comolly carried out his work. The Tribunal also found that Mr Comolly had a form of service contract with Mr Tidman due to the nature of their arrangement.

Both Mr Tidman and United Taxis appealed this decision. On appeal, the EAT held that the Tribunal had erred in two findings. Firstly, in respect of the relationship between Mr Comolly and United Taxis, the EAT considered that there was no necessity to imply such a contract between the two parties. They held that United Taxis contracted out the tasks of conveying passengers of the company to Mr Tidman, who in turn sub-contracted it out to Mr Comolly as the taxi driver. The EAT also held that the Tribunal had erred in its finding that Mr Comolly had an employment contract with Mr Tidman. This was particularly the case when they considered the question of control. Drawing on its findings, EAT substituted their finding that Mr Comolly was a worker of Mr Tidman, and clarified the fact that dual employment is a very difficult concept.

Types of employment status

This case reminds us that it is important to correctly establish employment status, and consider this in the context of the genuine practical arrangements between the worker and the work provider. It is important to ensure that this is established correctly, as employment status does affect the employment rights that a particular individual is entitled to benefit from. Under the Employment Rights Act 1996, there are two types of employment status: worker and employee. The status of the genuinely self-employed is not covered by the Employment Rights Act.

The EAT emphasised in this case that distinguishing between an employee and a worker requires a thorough examination of the specific facts and circumstances. Even if an individual has something in writing which appears to confirm their employment status, the practical arrangements will ultimately determine employment status for employment rights purposes.

Acas Guidance suggests that factors to consider in determining employment status for employees include the following:

• How dependent you are on the organisation for work
• How much control the organisation has over you and your work
• Whether you’re expected to carry out the work yourself or be able to substitute someone else.

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