Readers are no doubt already aware of the existential crisis the private hire industry is facing due to the increasing emergence of worker status claims by private hire drivers, often supported by trade unions. Unfortunately, as we will elaborate in this editorial, this issue appears to be compound- ing its effect on private hire operators.


Should an operator be taken to the Employment Tribunal by a driver(s), the Employment Tribunal will assess the specific facts of the case in line with the relevant legal tests, such as Uber.

Objectively, a Tribunal will assess whether the driver is obliged to personally provide their services to the operator and whether the operator is a customer or a client of the driver(s). this will be assessed against the ‘balance of probabilities’ (>50%).

This process is not straightforward and requires significant scrutiny of the facts by the operator, driver, and the Tribunal.


Should the Tribunal find that, on the facts, the driver is a worker, the driver will be entitled to statutory rights including, but not limited to: • • • • •

A National Minimum Wage

Protection against unlawful deduction of wages Statutory minimum level of paid holiday Statutory minimum level of rest breaks

Maximum 48-hour average hour working week

As you can appreciate, this could lead to hefty costs on the operator, depending on the specifics of the claim, and the award (if any) of the Tribunal.


As many readers are aware, it is not uncommon for operators to provide car hire facilities to drivers without licenced vehicles, either directly or through a separate company.

We have become aware of a matter in relation to the unlawful deduction of wages, specific to the situation above. The legal question is whether car hire payments to the employer or a third-party amount to an “expense in connection with employment” under Regulation 13 of the National Minimum Wage Regulations 2015?

Rather interestingly, there is no guidance or leading authority in relation to this matter, as at the writing this editorial. This ques- tion of law has not been tested and there is no guidance on what constitutes an “expense in connection with employment”.

The Tribunal could potentially consider HMRC’s National 60

Minimum Wage Manual 11090 that states “An expense includes any requirement imposed on the worker by the employer either contractually or otherwise.” This would imply that any payments for car hire made by the driver(s) could be considered an unlawful deduction of wages, however, it is worth noting that HMRC’s Manual is not legally binding to an Employment Tribunal, it is merely persuasive.

To put this in perspective, should car hire fees paid by the driv- er(s) to the operator or third-party be considered an unlawful deduction of wages, this could mean that a successful worker status claim could potentially leave the operator liable to reim- burse the driver(s) for any car hire costs they may have incurred. This could be yet another financial thorn in any operator’s side.


Most operator’s run their businesses on the premise that they provide intermediary services to self-employed private hire drivers. This can be compared to days gone by when bookings were taken by pen and paper and called out over a radio, albeit the technology has improved considerably since then. In doing so, the operator would not have to account for VAT on fares (that are not income for the operator, except perhaps, account work) providing the driver is not VAT registered.

Should a driver be found to be a worker, this would fundamen- tally change the complexion of the relationship between the driver and the operator. As the driver could now be consid- ered an agent of the operator, this would make the operator the principal on all bookings for this driver. This could result in the operator being liable for VAT on the bookings that the worker driver has undertaken.

Retrospectively, this figure could be staggering. CONCLUSION

It is suggested that worker status is an evolving issue as more and more cases are brought against private hire operators. It remains to be seen what the outcome of the “expenses in connection with employment” question will be; for now, it can be observed as a cautionary tale of the further possible consequences of worker status to an operator.

We would suggest that operators conduct a risk assessment of their working practices to mitigate their exposure to a worker status claim. Furthermore, should a claim be taken against an operator, we suggest they seek assistance at the earliest possible moment in order to manage the claim effectively.

Should you have any queries please contact TaxiLaw on 01743 298460 or email


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88