Gig economy again under scrutiny

An employment tribunal ruled that Addison Lee drivers are workers and not self-employed as argued by the company. In the same vein we await the outcome of the Uber appeal against the decision that its drivers are workers which begins tomorrow in the Employment Appeal Tribunal.

It certainly appears that the courts are increasingly reluctant to overlook the economic and practical reality of the relationship.  In Addison Lee, the drivers were under significant control in the way they were required to dress, communicate with customers, accept jobs and in the financial arrangements relating to vehicle hire.

In the pursuit for greater profit, various companies have sought increased margins based on reductions in worker costs. However it is proving very difficult to benefit from decreased worker costs without relinquishing the control over the delivery of the service which leads to worker or employment status.  

It will be interesting to see which way the EAT rules in the Uber appeal and whether or not an appeal will be lodged in Addison Lee. Currently though, the direction of travel is not looking good for these businesses.

The tribunal in central London ruled that three drivers, who claimed they earned the equivalent of about £5 an hour as self-employed contractors, should have been treated as workers. That means they must receive the minimum wage of £7.50 an hour, plus holiday pay, and will be owed back pay.

Addison Lee uses 3,800 self-employed drivers in the capital, who are all potentially affected by the case brought by Michaell Lange, Mark Morahan and Mieczys?aw Olszewski. Their lawyers estimate that holiday pay for each worker could amount to £4,000, with wages yet to be calculated.

The verdict is the latest legal blow to companies operating in the gig economy and raises the stakes for the appeal against a similar ruling against rival minicab operator Uber, which opens at the employment appeals tribunal on Wednesday.