When is a taxi driver not a taxi driver? When he’s a worker! Ok, maybe not the funniest of jokes. But it is this week’s Case of the Week.

The Employment Tribunal, in a landmark ruling, has stated that private hire taxi drivers are workers and not self-employed.

Employment rights all depend on the legal status of the individual. Whereas, very often, the employer and the individual will between themselves define the status of their relationship, the Law says different. Irrespective of what the parties might agree on paper, the legal status of the individual is determined by what goes on in the actual relationship and not what the parties have written down.

Why is this relevant? Well, it is actually very important. Different types of workers are afforded different rights and protections under the law. Employees have the greatest rights and protections and self-employed individuals have the least.  Somewhere in the middle is the rights of the ‘worker’ who, although they have no rights to claim unfair dismissal or redundancy pay, they are entitled to holiday pay, the national minimum wage and protection from discrimination and have whistle blowing rights.

The Facts

Mr Shah and Mr Adjei worked for Bounds Taxis in Northampton as taxi drivers. Their agreement with the taxi company was that they were self-employed. However during the course of their work, they were subjected to the company’s disciplinary procedure, they were told what to wear and penalised for failing to do so. They were also penalised if they refused a job from dispatch. Bounds also charged each driver £9000 ‘rent’ and fined them £10 per day if they were late in making a payment.

Mr Shah and Mr Adjei raised a Tribunal claim to be afforded the status of workers so that they would be entitled to holiday pay and the national minimum wage.

The Tribunal

The Tribunal made it clear that in this situation the taxi drivers were workers.

A person is a worker if –

  • they have a contract or other arrangement to do work or services personally for a reward (the contract doesn’t have to be written)
  • their reward is for money or a benefit in kind, for example the promise of a contract or future work
  • they only have a limited right to send someone else to do the work (subcontract)
  • they have to turn up for work, even if they don’t want to
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they aren’t doing the work as part of their own limited company in an arrangement where the ’employer’ is actually a costumer or client.

The Tribunal were very scathing of Bounds Taxis saying that their evidence was “largely unhelpful, disingenuous and evasive on occasions.”

Comment

It remains to be seen whether other taxi drivers will therefore be afforded the same status or whether it was the peculiarities of Mr Shah and Mr Adjei’s working relationship with Bounds Taxis company that means they should be classed as workers.

In any event, employers need to be very mindful of what title they give individuals who work for them as if that category is deemed to be incorrect, they may find themselves paying out a lot of money in back dated holiday pay and also having to meet national minimum wage payments. Not to mention any award of compensation for breach of current discrimination laws.