Another blow to the gig economy

Another blow to the gig economy

Following the recent landmark tribunal rulings for Uber and Hermes drivers, London Taxi company Addison Lee now face a £39 million bill as their taxi workers are once again classed as workers rather than self-employed.

The Employment Appeal Tribunal upheld a previous decision classing the company’s taxi drivers as workers rather than self-employed contractors. The GMB Union have said the ruling is ‘another huge win for workers rights.’’

Following the Uber and Hermes drivers rulings, the employment tribunal have yet again decided that the company’s drivers are legally entitled to certain employment rights including national minimum wage and holiday pay. The company has around 4,000 drivers and is now being called upon to extend employment rights to all their drivers.

According to the union’s solicitors, Leigh Day the decision could cost Addison Lee up to £10,285 per driver in making good unpaid holiday pay and ensuring wages were up to national minimum wage standard over the past 2 years.

Sue Harris, GMB union's legal director, said 'Other employers should take note - GMB will not stop pursuing these exploitative companies on behalf of our members.'

Liana Wood, solicitor at Leigh Day who represented the drivers of Addison Leigh stated 'We hope that Addison Lee will accept this decision; drivers shouldn't have to continue to work very long hours, often in excess of 60 hours per week, to earn just enough to meet their basic living costs.'

The taxi firm Uber has been involved in a similar legal battle for the last few years. In 2016 2 drivers won at tribunal over paid holiday, arguing they were in effect employees. But last month at the Court of Appeal Uber argued that the previous decision had 'erred in law' by ignoring its contracts, and that the relationship between the company and its drivers is 'typical of the private hire industry' and had been used for years. The decision is awaited with interest.

Hermes lost its battle with 65 drivers in another blow for businesses who have thrived thanks to the gig economy which employs more than 5million people in the UK.  A tribunal has ruled that the 65 people who brought claims should be treated as staff with perks including sick and holiday pay and paid breaks while delivering packages for customers. 

What do these rulings mean for Employers?

Classing an individual as a ‘worker’ entitles them to certain employment rights such as the national living wage, paid holiday and sick leave which evidently means increased costs for employers. It is for each an employer to consider its own situation carefully with an eye on the law as falling foul may entitle staff to retrospective compensation.

A useful guide can to determine employment status can be found following the link below.

http://www.acas.org.uk/index.aspx?articleid=5071

If you require further assistance contact one of our experienced staff at our Employment team.