Hello and welcome back to your weekly case law update. Last week we looked at disciplinary investigations and unfair dismissal, this week we are looking at employment status and the gig economy.

This week we also have some exciting news relating to an upcoming book that a member of PJH Law has written. Find out who here!

Employment status is an issue that has rapidly evolved over the past 12-18 months. Cases like Uber, Pimlico Plumbers, Hermes and Addison Lee have set clear precedent that Tribunals will look at how contracts are performed, as well as how they are written.

However, whilst there is case law, this area of law will most likely be revamped if/when the Government enacts the Taylor Report. Due to Brexit, political infighting and cabinet resignations (the post of Brexit Minister is now a consolation prize on the postcode lottery), the Government has yet to enact any of the report’s suggestions meaning this area of law will probably change significantly at some point post-Brexit

In the meantime, the cases keep coming. This week’s asks:

Is the current method of determining employment status, interpreting how the contract is performed, the correct way?

This is the second case Addison Lee have had at EAT level this year. In this case, Mr Lange and two other drivers, the Claimants, were said to be engaged as self-employed drivers for Addison Lee Ltd, the Respondent.

The Claimants were interviewed and given an induction by the Respondent and were set guidelines of how they had to dress and work. The Claimants then had to hire a branded vehicle from one of the Respondent’s affiliated companies. The Claimants were told they represented the Respondent when they were driving this vehicle.

The Claimants were also given a personal computer to log into when they wanted to be allocated fares. The Claimants had to accept jobs promptly and if insufficient reasoning was given for refusing a job, the Claimants would face sanctions, including not being allocated other jobs for a period of time.

The Claimants bought ET claims. They believed that they were workers and thus entitled to holiday pay and the National Minimum Wage. The ET held they were workers. Despite the contract between the Claimants and the Respondent alleging the drivers were self-employed, the fact they were closely managed by the Respondent and the Claimants had an obligation to perform work when they logged into the computer meant they were workers and thus entitled to the NMW and holiday pay.

The Respondent appealed stating that the ET had been wrong to disapply parts of the contract that stated the Claimants were self-employed and could reject jobs if they wanted to. The EAT rejected the appeal, it held that the correct approach, as adopted by the ET is to look beyond the written contract.

The takeaway point:

To answer today’s question, yes, the current approach adopted by the courts is how employment status cases should be determined. Simply claiming someone is self-employed does not make them self-employed.

This area of law may be torn up and started again if the Taylor Report is ever enacted. However, until that happens (if it ever does), this approach is the one Tribunals will use and employers need to be wary of engaging self-employed workers that they exercise large degree of management control over. It might be better to state they are workers or employees from the offset.