There has been long running litigation relating to the employment rights of Uber drivers and other individuals working with similar arrangements. However, each person’s employment status will depend on the particular facts of the case, and the fact that some individuals may have statutory employment rights does not mean that everyone who works in a similar role and in a similar way will have, or will be guaranteed, the same protection.
In this news alert, Partner David Fisher explores the outcome of Johnson v Transopco UK Ltd [2022] EAT 6, and what it means for the employment rights of taxi drivers and similar workers.
Factual background to the case
Mr Johnson was a London black-cab driver, initially working full time in business on his own account. After approximately three years, he registered as a driver on Transopco’s app, the “MyTaxi App”, but also continued to work in business on his own account. Between April 2017 and April 2018 he used the MyTaxi App and completed 282 trips via the App, at a total value of £4,500. In the same period, he earned £30,472 through other sources as a self-employed driver. He generally worked eight hours per day over a five-day week, and on average did fewer than one and a half trips per day via the MyTaxi App.
In August 2018, Mr Johnson brought claims in the employment tribunal (ET) that were dependent on his being a worker (these claims included work-time holiday pay, unlawful deduction from wages and failure to pay national minimum wage). The ET found that he was not a worker because, although he had an obligation to perform services personally, Transopco was a “client or customer” of Mr Johnson’s driving business. His claims therefore failed. He appealed unsuccessfully to the EAT, which upheld the ET’s decision.
Section 230(3) Employment Rights Act 1996 states that a worker means an individual who has entered into or works under:
- a contract of employment, or
- any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;
and any reference to a worker’s contract shall be construed accordingly.
Mr Johnson claimed that at the relevant times, he was a worker of Transopco pursuant to limb (b). Transopco argued that although he had an obligation of personal service to the company, it was a client or customer of his taxi-driving business.
ET decision
The ET found that passengers entered into contracts with Transopco for transportation services, which were then delivered through a separate contract between Mr Johnson and Transopco. Therefore, Mr Johnson had an obligation of personal service to Transopco under that contract.
Despite the requirement of personal service, the ET did not think that Mr Johnson was a worker of Transopco. Instead, the ET held that Mr Johnson and Transopco had contracted with each other as two independent businesses and Transopco was a client or customer of Mr Johnson’s taxi business. This meant that Mr Johnson was excluded from the “worker” definition.
The fact that Mr Johnson could provide his services as infrequently or as often as he wanted, could dictate the timing of those services, and was not subject to control by Transopco in the way in which those services were undertaken indicated a level of independence that was consistent with an independent contractor running his own business.
In reaching its decision, the ET highlighted and focused on two key factors: the level of control by Transopco and Mr Johnson’s activities while he was not working for the company.
Control
Even when Mr Johnson’s profile was displayed as “free” on the app, he was under no obligation to accept any jobs and was still free to market his services and give preference to street hails. For the majority of the time, this is exactly what he did.
Once a job was accepted, it was still open to Mr Johnson to cancel it within certain parameters without penalty. While drivers could be suspended from the app for excess cancellations, the ET did not consider that sanction to be a significant measure of control when weighed against everything else, as Transopco had a vested interest in protecting the reputation of its brand.
The ET rejected the argument that asking passengers to rate drivers was a form of control by way of monitoring performance, as there were no consequences associated with poor ratings and it was up to the individual drivers as to the steps they took, if any, to address them.
The drivers who used the app held individual licences to drive black cabs within their designated areas. Mr Johnson was licenced by Transport for London (TFL) to provide a black cab service and it was he who could be sanctioned or prosecuted for not complying with it. Much of the control the drivers were subjected to was dictated by TFL rather than Transopco. This distinguishes this case from the Uber decision, where Uber set the default route, fixed the fares and imposed other conditions, such as choice of vehicle.
Again, unlike Uber, Transopco did not exclude its drivers from receiving key passenger information. Not only were drivers sent the name, contact details and destination (if known) of the respective passenger, they could also contact the passenger after the trip, something which was strongly discouraged by Uber.
The fact that Transopco was more powerful (in scale and financial terms) than Mr Johnson was held to be immaterial when weighed against all other factors.
Dependent relationship
The ET held that there was no dependent work relationship between Mr Johnson and Transopco. Mr Johnson chose not to accept 75% of the trips offered to him through the app and cancelled 35.4% of the jobs he accepted. On average, his trips via the app represented less than 15% of his overall income from taxi-driving, and it was clear from this that the app was not Mr Johnson’s main source of income and that he did not need to sign up to the app in order to work.
EAT’s decision
In his appeal Mr Johnson argued that ET had placed too much focus on his driving activities when he was not working for Transopco, and that the ET’s approach risked two drivers carrying out the same job through the same app on the same terms having different employment statuses, depending on the number of journeys they each performed.
However the EAT held that ET was entitled to rely upon its findings about the proportion of Mr Johnson’s time and income earned via the MyTaxi App, as well as his rate of declines and cancellations, when considering whether his work for Transopco formed part of his own business. In response to the latter point, the EAT said that the nature of the legal test, which contains an element of factual subordination or dependency, means that different outcomes in different cases involving the same app cannot be ruled out.
The fact that some incentives and risk-sharing were offered by Transopco to reflect the risks associated with using its platform, or generally to enhance its financial attractiveness as an option, did not automatically imply worker status and the ET was entitled to find otherwise in this case.
What does this mean?
This case is a good reminder that questions of worker status will always be fact specific, and determining whether an individual is an employee, worker, or self-employed under the ERA and other employment legislation might require a detailed and complex analysis. This case also clearly demonstrates that a Tribunal may take into account the proportion of a claimant’s total business activities that he or she carries out for the respondent when determining employment status. This may present a challenge when determining worker status, where an individual works through various platforms and/or apps for multiple work providers at any one time.
If you have any questions regarding the issues discussed in this article, please contact Partner David Fisher, who specialises in employment and partnership law for senior executives, multinational employers, partnerships and partners.
