News & Insights

Employment law recognises three statuses; self-employed, worker, and employee. This status matters because it determines their level of protection and rights under employment law.  This is a complex area, with few hard and fast rules, because it has evolved with case law. It continues to evolve as new business methods, such as online marketplaces, create new ways of working – as has been seen with the cases involving Uber and Deliveroo.

Below we consider 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 clarity on the horizon.

Why is employment status important?

Employees have the greatest rights, such as to family-friendly leave and protection from unfair dismissal, while self-employed individuals have no 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 for 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 this 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.

Background to 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.

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 did the EAT decide in the Gettaxi case?

The EAT concluded that Mr Johnson was not a worker, and decided that he was self-employed. In reaching this conclusion, it looked at the degree of control exercised by Gettaxi and the overall relationship. Compared to the Uber case, 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. As the EAT concluded that Mr Johnson was not a worker, he could not claim protection as a whistleblower.

What does the Gettaxi case tell us?

As each case relating to employment status shows, it is not possible to use broad categories; the outcome of every case will depend on the detail.

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’. 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.

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 one of our Employment experts.

 This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.