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Employment status: are Addison Lee Couriers workers?

The Employment Appeal Tribunal (‘EAT’) has rejected Addison Lee’s attempt to overturn a judgment by the Employment Tribunal (‘ET’) which found that one of their cycle-couriers was entitled to basic employment rights.

The EAT’s decision is yet another example of the gig economy litigation in which the Tribunals have looked past the written words of the contract of employment to examine the real working arrangements between the parties.

Background

The claim concerned one weeks’ holiday which the Claimant took but was not paid for by the ‘employer’. The Claimant brought a claim in the ET which Addison Lee defended on the basis that the Claimant was not a ‘worker’ entitled to basic employment rights such as holiday pay, but an independent contractor.

As proof of the Claimant’s arms-length relationship, the company relied on the terms of his contract of employment, which included:

  • Declarations that the Claimant was not an ‘employee’ or a ‘worker’ and that Addison Lee was simply an agent for the couriers.
  • A ‘zero-hours’ clause putting no obligation on either party to offer or perform any work.
  • A promise by the Claimant to pay Addison Lee’s legal costs should he dispute his employment status.

The Employment Tribunal Judgment

The Employment Judge rejected the company’s arguments and evidence. She found that the Claimant had to be willing and available to work within central London when he was logged on to the Respondents mobile app and at these times he was subject to the employer’s control. He was not running a business of his own as an independent contractor and Addison Lee took measures such as protecting the couriers from non-payment, which it did not have to take if they were genuinely independent.

The Appeal

Addison Lee appealed to the EAT on two grounds. Firstly, there was no basis to conclude that the Claimant was under an obligation to accept jobs once logged on. This was a purely ‘zero-hours’ contract with no mutuality of obligation. Secondly, the company argued that the ET got its facts wrong by relying on the Claimant’s evidence where it should not have done so.

On 11 May 2018, the Employment Judge presiding in the EAT with two lay members, dismissed the company’s appeal entirely.
On Ground 1, the EAT concluded that during the period that the Claimant was logged on, there was a contractual relationship with identifiable obligations to offer and receive work. Just because a courier could log off at any time, that did not defeat the obligation to accept work when logged on.

Dusting-off an infrequently cited case about garment workers in the 1980s (Nethermere (St Neots) Ltd v Gardiner [1984] I.C.R. 612), the EAT explained that the mutual obligation to provide and accept work can arise from established practice and the expectations of the parties, even in what was apparently a ‘zero-hours’ contract.

On Ground 2, the EAT rejected the company’s attempts to overturn various other factual findings by the Tribunal as ‘minute dissection’ of the evidence heard and arguments based on ‘semantics’ rather than substance.

Conclusion

Much like Uber’s Tribunal appeal before it, Addison Lee faced a challenging task in overturning the highly fact-sensitive findings of the ET. The EAT’s point that a zero-hours clause may not always faithfully reflect the reality of the working relationship is a useful one to bear in mind for employers and those employed by them. Caution should be exercised by any employers seeking to rely on zero-hours clauses if, in practice, persons employed are expected and expecting to perform certain amounts of work.

Employment lawyers and their clients can expect further developments in this area, with decisions from the UK Supreme Court in Pimlico Plumbers and the Court of Appeal in Uber to follow soon.

In the meantime, if you need any help and advice in relation to the above, please do not hesitate to contact me or the employment team on 0113 350 4030 or at hello@scesolicitors.co.uk

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SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Richard Newstead

Richard qualified as a Legal Executive over 20 years ago and has significant experience in Employment law and Litigation.

Richard acts for both employers and employees drafting and advising on settlement agreements, contracts of employment, consultancy agreements, directors service agreements and general workplace policies. He acts for commercial clients in the employment tribunal dealing with unfair dismissals, constructive dismissals and claims for discrimination.
Richard Newstead

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Richard Newstead

Richard qualified as a Legal Executive over 20 years ago and has significant experience in Employment law and Litigation. Richard acts for both employers and employees drafting and advising on settlement agreements, contracts of employment, consultancy agreements, directors service agreements and general workplace policies. He acts for commercial clients in the employment tribunal dealing with unfair dismissals, constructive dismissals and claims for discrimination.

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