Self Employed or Worker? - Addison Lee & Uber

What is a “worker”? A worker is someone who has more rights than the self-employed but fewer than the employed. So a worker has the right to the National Minimum Wage, paid holidays and not to be discriminated against, and may also be entitled to various work related benefits such as Statutory Sick Pay and Statutory Maternity Pay. The distinction between worker and self-employed has significant implications for the gig economy. Research suggests almost half a million workers are wrongly categorised as self-employed which represents a huge loss of workers’ rights, and a huge loss to the Treasury in terms of taxes.

Drivers at taxi firm Addison Lee are regarded as self-employed. They are accustomed to working extremely long hours and in 2017 a group of them successfully brought a claim in the Employment Tribunal saying they were workers and entitled to the National Minimum Wage and paid holidays.

The Employment Appeal Tribunal (the “EAT”) recently upheld this decision which means drivers are entitled to the National Minimum Wage from the moment they clock on to the moment they clock off.  But why did the EAT decide that drivers were workers? Work is distributed to the drivers by portable computer and they are expected to take it promptly and if they don’t, they are expected to explain why, and if the explanation is not accepted, there can be penalties. The EAT concluded the drivers did not have a degree of control over their work consistent with self-employment.

The case was brought by the GMB Union which says it will pursue other cases of “bogus self-employment”. Addison Lee may go to the Court of Appeal.

Meanwhile Uber is in the Court of Appeal trying to overturn the 2017 EAT finding that its drivers are workers. There are fears that if Uber is successful its business model will roll out across the economy. Some say this should be welcomed as large organisations present opportunities for Government regulation whereas patchworks of small businesses are under the radar. And others argue self-employed drivers earn more on average than they would on the National Minimum Wage.

The EU is now proposing a regulation to protect workers in the gig economy but it’s unclear whether this will be brought in before Brexit, and if it’s not, whether the UK will adopt similar regulations in any event.

Will Addison Lee appeal? Are Uber drivers self-employed or are they workers? Will the EU or the Government step in to legislate? Watch this space…