16 Nov Addison Lee Must Classify Drivers as Workers, Court Rules
The gig economy has taken another hit as a court in England has ruled that drivers for private hire firm Addison Lee are workers and not self-employed.
The decision, which was made at the Employment Appeal Tribunal, means that a ruling from last year which said the company’s drivers were legally entitled to workers’ rights such as the minimum wage and holiday pay still stands.
It also means that Addison Lee’s cars have to charge VAT on their journeys rather than using the self-employed status of the drivers to exempt themselves – and appear 20 per cent lower than drivers who work for a company.
Addison Lee had hoped the EAT would overturn the court ruling, which was brought against the company by a number of its drivers.
The ruling brings the company’s workers in line with other companies who have faced high-profile criticism for their approach to workers’ rights including Uber and My Hermes.
Sue Harris, legal director of the GMB union, described the result as “another huge win for GMB over bogus self-employment.”
“Once again, the courts have agreed Addison Lee drivers are legally entitled to workers’ rights such as the national minimum wage and holiday pay rights.”
The drivers were represented by Liana Wood, solicitor at Leigh Day acting on behalf of the GMB, who said Addison Lee’s business model of a “fleet of highly trained, regulated drivers” was “incompatible with their arguments that drivers are not workers who are entitled to workers’ fundamental rights.”
One of the drivers who brought the claim said they did so “because we wanted Addison Lee to treat drivers fairly.” Michaell Lange was one of a group of drivers who started the process back in 2016.
Fareed Baloch of Zoom.taxi said the ruling “was good news for drivers and good news for smaller companies who are not able to charge 20% less than so-called self-employed drivers.”
“Owner-drivers and small private hire companies have not only had to compete with the huge marketing power of companies like Uber and Addison Lee but the fact that if they are directly working for one company they cannot avoid charging VAT at 20%.
“But it is also welcome news because this idea of fairness is one which is gaining traction: if people do a job they should be properly paid for it. I think the majority of people in this country want to know that the person who is driving them home safely earns at least the minimum wage and can afford to take time off work to relax and spend time with their family.”
The President of the Law Society of England and Wales, Christina Blacklaws, said the law had not kept up with changes in the structure of the economy and the way in which people are now employed.
“Employees and contractors are treated differently when it comes to employment rights and tax responsibilities. This means organisations are incentivised to find loopholes to their benefit, which can be detrimental to the employees,” she said.
Addison Lee said: “We note the appeal verdict, which we will carefully review. Addison Lee is disappointed with the ruling as we enjoy a positive relationship with the vast majority of our 3,800 driver partners.
“In common with most of the industry, the majority are self-employed, and with earnings at a record high, over 60pc said they were likely or very likely to recommend working for Addison Lee in our most recent driver satisfaction survey.”