Taxi driver loses appeal concerning “worker” status

Background

From 2014, Mr Johnson worked full time in business on his own account as a black cab driver in London. He registered as a driver on the Mytaxi app in February 2017. Between April 2017 and April 2018, he completed 282 trips via the app at a total value of £4,560.48 (after commission). During the same period, Mr Johnson continued working as a self-employed black cab driver and earned £30,472.45.

In August 2018, Mr Johnson brought various claims against Transopco UK Ltd, which operates the Mytaxi app, for the national minimum wage, holiday pay, unlawful deduction from wages and detrimental treatment for whistleblowing.

In order to succeed with these claims, Mr Johnson had to be a “worker” of Transopco, rather than an independent contractor.

Under the relevant statutory tests, a worker is either (a) an employee (i.e. employed under a contract of employment); or (b) someone who works under a contract through which they undertake to perform work personally, for someone who is not by virtue of that contract their client or customer. In other words, workers agree to work personally and are not running their own business.

Employment Tribunal’s decision

The Employment Tribunal found that passengers contracted with Transopco for transportation services, which were then delivered through a separate contract between Mr Johnson and Transopco. Mr Johnson had an obligation of personal service to Transopco under that contract.

Despite the requirement of personal service, the tribunal did not think that Mr Johnson was a worker of Transopco. Instead, the tribunal held that Mr Johnson and Transopco 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 fell within the exclusion in 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 tribunal highlighted two key factors: the level of control by Transopco and Mr Johnson’s activities while he was not working for it.

Control

Even when showing as “free” on the App, Mr Johnson was under no obligation to accept any jobs and was still free to market his services to potential street hail passengers and pick them up in preference. For the majority of the time, this is exactly what he did.

Once a job was accepted, it was still open to drivers to cancel within certain parameters without penalty. While drivers could be suspended from the App for excess cancellations, the tribunal did not consider that sanction to be a significant measure of control when weighed against everything else. Transopco had a vested interest in protecting the reputation of its brand. Cancellations were detrimental to the overall customer experience and discouraging these spoke more to commercial expediency than control.

The tribunal rejected the argument that asking passengers to rate drivers was a form of control by Transopco. 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 that 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.

Dependant relationship

The tribunal held that there was no dependant 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, he carried out 1.5 trips a day via the App, which represented less than 15% of his overall income derived from taxi-driving. It was clear from these statistics 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.

Employment Appeal Tribunal’s decision

Mr Johnson appealed to the Employment Appeal Tribunal (EAT) on a number of grounds. He submitted that the tribunal had placed “impermissible focus on his driving activities when he was not working for the respondent”, and that the tribunal’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.

The EAT held that the tribunal 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, and as pointing towards its conclusion that this was not a dependant work relationship.

In response to the “numbers game” point, the EAT said that the nature of the legal test, containing as it does an element of factual subordination or dependency, means that different outcomes in different cases involving the same app cannot be ruled out.

Mr Johnson further tried to argue that the transportation services he provided to Transopco did not form part of his black cab driving business and that they were a distinct activity.

The EAT rejected this argument. In its view, Mr Johnson’s business activity involved picking up passengers and driving them to where they wanted to go, however those passengers were obtained. The tribunal had been entitled to take the view that how a particular passenger had been found, by plying for hire, street hail or via an app, was not relevant to whether that work was done in the course of that same business.

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 tribunal was entitled to find otherwise in this case.

The EAT held that the tribunal had considered every feature of the case and there was no basis on which the EAT could properly interfere. The EAT dismissed the appeal.

Implications

This case is a powerful reminder that employment and worker status cases turn on their own facts. A particular case may not be determinative of status issues involving a different platform, and it may not even be determinative of such issues in relation to different users of the same platform.

The case also demonstrates that a tribunal may consider what amount of a claimant’s total business activities it carries out for the respondent when determining employment status. This could have a significant impact in future cases given the rise in “multi apping” – that is, individuals working through platforms making themselves available to multiple potential work providers at one and the same time, then choosing to accept whichever piece of work is offered to them on the best terms.

That said, the EAT did also make clear that what happens when a claimant is not working for the respondent will not always make a difference to the tribunal’s conclusion as to whether they are a worker when doing a job for the respondent.

Johnson v Transopco UK Ltd – judgment available here.