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Employment status | Bolt drivers case highlights the dangers of treating workers as self-employed
Written by Chloe Kamutikaoma on 9 December 2024
The issue of employment status has long been a grey area, particularly for workers in the gig economy.
In many cases, companies classify their workers as self-employed to sidestep certain rights and liabilities associated with full employment, such as sick pay, holiday pay, and pension contributions. This approach has sparked several high-profile legal battles in recent years, including the landmark case against Uber.
Now, in a similar ruling, drivers for the ride-hailing company Bolt have won a significant case that classifies them as workers rather than independent contractors.
Bandi and others v Bolt: A turning point for gig economy workers
Bolt, a popular ride-hailing and food delivery platform, faced legal scrutiny over its treatment of its drivers, whom it classified as self-employed. The claim was brought by six sample Claimants from a pool of 10,000 private hire drivers who were part of a larger claim that they were in fact ‘employed’ by Bolt as ‘workers’, thereby entitling them to receive National Minimum Wage, paid annual leave, and certain other benefits.
Bolt resisted the claims, maintaining that the Claimants did not qualify as ‘workers’ and that they were engaged by the company as self-employed independent contractors.
However, the Tribunal found in the Claimants’ favour. It ruled that they were in fact workers and that a worker contract came into existence when drivers a) were in the territory in which they were licensed to operate and b) had the Bolt App switched on.
There were several key factors that led to the success of the claim. One of the most significant was the level of control that Bolt had over its drivers. The Tribunal found that Bolt exerted a significant degree of control over how, when, and where drivers worked – a key factor in determining employment status.
Bolt also provided the drivers with a platform through which they could find work, making the relationship more akin to that of an employer-employee than a self-employed contractor. The Tribunal found that “overwhelmingly, the power lies with Bolt” and that “there is nothing in the relationship which demands, or even suggests, agency on the part of the drivers”.
It concluded that “the supposed contract between the Bolt driver and the passenger is a fiction designed by Bolt – and in particular its lawyers – to defeat the argument that it has an employer/worker relationship with the driver”.
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Why employment status matters
Employment status determines the rights and protections an individual is entitled to. Therefore, if a person’s status is incorrect, this can have significant consequences for employers, especially financial.
Currently, there are three types of employment status that an individual may have when carrying out work for someone else: an employee, a worker, or self-employed.
- Employees (the most protected category) benefit from comprehensive rights, including paid annual leave, statutory sick pay, and protection against unfair dismissal.
- Workers have fewer rights than employees but still enjoy key protections, such as the right to receive the National Minimum Wage and protection from discrimination.
- Genuinely self-employed individuals, on the other hand, have no employment rights at all.
Misclassifying workers as self-employed can allow companies to cut costs by avoiding these employment obligations. However, this approach can lead to significant legal challenges, as demonstrated by the cases of Bolt and Uber, and may ultimately prove more costly in the long run.
Lessons for employers
For businesses, the Bolt case serves as a fresh reminder of the importance of correctly classifying your workers. Misclassification can lead to costly legal battles and even greater damage to your reputation.
The case also highlights the growing scrutiny of gig economy businesses and adds to the mounting body of evidence that many workers in these industries may not, in practice, be as ‘independent’ as companies portray. In cases such as this, Tribunals will thoroughly examine the working relationship to determine an individual’s true status.
With stories like this continuing to make headlines, individuals are becoming more aware of their rights and increasingly questioning their employment status, making it crucial to have clear contracts that accurately reflect the true nature of the working relationship.
As the gig economy continues to grow, employment status will remain a key issue. This ruling could set a precedent for future cases, prompting companies to reassess how they treat their workers, prioritise transparency and fairness, and ensure compliance from the outset.
How to determine someone's employment status
Key factors to consider when determining an individual’s employment status include:
- Level of control – Does the employer dictate when and how work is done?
- Mutuality of obligations – Is the employer obligated to provide work, and is the individual obligated to accept and complete it?
- Personal service – Is the individual required to carry out the work themselves, without the option to delegate or have someone else do it for them?
- Integration – Is the individual integrated into the organisation, such as attending team meetings or using company systems?
- Financial risks – Does the individual face little to no financial risk, such as not being responsible for losses or the cost of tools?
- Equipment – Does the employer provide the tools, equipment, or materials required for the job?
- Remuneration – Is the individual paid a regular salary or wage rather than being paid per job or project?
- Taxation – Is the employer responsible for deducting income tax and National Insurance contributions from the individual’s earnings?
If the answer to these questions is ‘yes’, the individual is more likely to be an employee or a worker, rather than genuinely self-employed, and will therefore be entitled to all the rights and protections that come with these statuses.
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