York Employment law currently recognises three statuses; the self-employed, worker, and employee. Identifying the correct status is vital because it determines the level of protection afforded and liabilities incurred. The three statuses are not particularly clearly defined in the Employment Rights Act 1996 either, and as a result, numerous tribunal cases have sought to establish concrete principles, in different ways and in multiple contexts, ultimately to the confusion of employers and employee alike. Successive governments have avoided tackling the issue too, and it has been kicked into the long grass as far as the Employment Rights Bill is concerned.
This lack of absolute clarity makes it difficult for employers, who may sometimes be unaware of their liabilities, through no fault of their own.
Our Employment law expert considers how the Employment Appeal Tribunal (EAT) dealt with employment status in the gig economy in Johnson v GT Gettaxi [2024], the importance of employment status and if there is any further clarity on the horizon.
Why is employment status important?
Employees have the most protection and legal rights at work, such as family-friendly leave and protection from unfair dismissal. The self-employed have minimal employment rights. Workers have some of the rights enjoyed by employees, such as the right to paid holiday and the national minimum wage, as well as protection from discrimination and, significantly from the Gettaxi case, whistleblower protection.
What does employment status mean for tax purposes?
For tax purposes, there are only two categories; employee and self-employed. Although similar principles apply to determine which category an individual falls into, tax status does not determine employment status or vice versa. Critics of the current rules point out that these can lead to self-employed individuals paying the same levels of tax as an employee but without the benefit of the legal rights or protection enjoyed by an employee.
Decision of the Gettaxi case
Taxi drivers who use an app service to connect with customers will not always be treated as workers, as was decided by the Supreme Court in 2021 in relation to Uber drivers in Uber v Aslam.
Background
Mr Johnson used the Gettaxi app to gain customers. He was a licensed black cab driver in London. As such he operated under the hackney carriage regulations, which controlled fares and he was required to have passed ‘the knowledge’. He could, and did, still use other ways to secure rides, and only a small proportion of his earnings came through the Gettaxi app.
After having used the app for a couple of years he stopped using it, but later he applied to re-join the platform. His application was rejected and he asserted that this was in response to him having made whistleblowing allegations.
Mr Johnson would only have protection as a whistleblower if he could establish that he was a worker, rather than self-employed.
What does the Gettaxi case tell us?
As each case relating to employment status shows, it is not possible to use a standard test to establish employee status: it will depend on context and the detail.
The EAT concluded that Mr Johnson was not a worker, and decided that he was self-employed. In reaching this conclusion, the Employment Tribunal looked at the degree of control exercised by GT Gettaxi and the overall relationship between the parties. Compared to the Uber case, GT Gettaxi exerted less control over drivers, for instance:
- Gettaxi did not determine the routes drivers should take;
- there were no penalties for rejecting rides (although if done repeatedly, bookings would be made through the admin team instead of directly); and
- as a black cab driver, Mr Johnson was bound by the rules of the external regulatory regime on accepting rides.
Mr Johnson operated his own taxi business, unlike the Uber drivers who were integrated into Uber’s business. The EAT concluded that as Mr Johnson was not a worker, he could not claim protection as a whistleblower.
Is there change on the horizon?
There are no immediate plans to make changes to the law relating to employment status. In 2024, the Government published its ‘Next Steps’ policy, including its intention to move towards a single status of worker and a framework that would still allow differentiation between workers and the ‘genuinely self-employed’. Although the Government has committed to starting consultation on employment status by the end of 2025, at the time of writing, there is no confirmed date for this and clarity stills seems unlikely any time soon.
How we can help
We can help determine the status of individuals working for you to ensure that there are no hidden liabilities within your workforce, including among your contractors.
We can also give pragmatic advice on ensuring that your working arrangements and agreements with contractors and workers minimise the risk that you are inadvertently giving them greater rights and protection than intended.
For further information, please contact our Employment Team on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email law@warekay.co.uk.
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