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  • Overview

    In the latest victory for gig economy workers following Uber’s loss at the Supreme Court last month, the Court of Appeal has dismissed an appeal by the company Addison Lee against an employment tribunal decision which found that drivers were entitled to the minimum wage from the time they logged on as ready to take passengers to the time they logged off. This follows from the UK Supreme Court’s ruling in the Uber BV v Aslam [2021] case which found that Uber drivers would be classed as workers, not independent contractors, thus giving them access to the minimum wage and paid holidays.

    The decision in Addison Lee Ltd v Lange and others

    Back in 2017, an employment tribunal found that Addison Lee drivers would be treated as workers for the purposes of employment law rights such as access to the minimum wage and holiday pay. Key to this was the tribunal’s application of the concept of mutuality of obligation (the obligation to offer work to them and the obligation to take work when offered to them) to the contractual arrangements. Essentially, the tribunal (ET) found that there was an overarching contract between Addison Lee and its drivers, which imposed rights and obligations on both parties. It was immaterial that drivers did not need to be offered a minimum amount of work and were free to refuse work if they wished. Tribunals must look at the reality of the working relationship and not be steered purely on the basis of what the parties had contracted to. Addison Lee appealed the). In 2018, the EAT held that the ET had correctly concluded that there was a contract in existence during the periods when a driver logged on to the Addison Lee app. But the decision of the employment tribunal was not binding on subsequent cases and, from here on, an almost haphazard, case-by-case approach was taken in worker status disputes. Addison Lee subsequently appealed the findings of the EAT and began the long wait for a ruling by the Court of Appeal.

    However, following the Supreme Court’s landmark decision in Uber BV v Aslam [2021], which ruled that Uber drivers would be classed as workers with access to the minimum wage and paid holidays, the Court of Appeal were able to comfortably dismiss the appeal made by Addison Lee. The judgment said: “There is no arguable error in the finding of the ET, upheld by the EAT, that in the present case the claimants were limb (b) workers. Now that the Supreme Court in Uber has emphatically reaffirmed the “Autoclenz principle”, there is no longer a reasonable prospect of success in overturning that finding in the present case and there is no compelling reason why this appeal should proceed further. ”The Autoclenz principle” is that the courts should look at the realities of the working relationship and not just what was formally contracted to: Were there rules for the drivers to follow? Were there consequences for non-compliance? Are there all the hallmarks of an employer-employee relationship? The practical effect of the ruling of the Court of Appeal is that thousands of Addison Lee drivers could now be entitled to an average £10,000 each in compensation for loss of pay (when not meeting the minimum wage) and unpaid holiday accrued during their years of service.

    Our thoughts

    Whilst this was the expected conclusion following the decision in the Uber case, it will serve as another wake-up call to large firms operating in the gig economy. They must alter their business models and no longer deny workers basic employment rights. Having said that, the Lange case began almost four years ago now and Addison Lee have already made significant changes to their working practices.

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