UK

Thousands of Bolt Drivers Fight for Worker Status and Compensation Over Unpaid Holiday Pay and Wage Discrepancies


Published by Laetitia at September 29, 2024
STUDENT LAWYER
Article written by Olga Kyriakoudi

More than 12,500 Bolt private hire drivers are contesting their employment status at the Central London Employment Tribunal, with hearings starting on 11 September. Represented by Leigh Day, a leading employment law firm, the drivers are pushing to be recognised as workers rather than independent contractors. Achieving this status would entitle them to crucial employment rights, such as holiday pay and the National Living Wage. They argue that Bolt exerts significant control over their working conditions, a situation comparable to Uber drivers who secured a landmark victory at the UK Supreme Court in 2021.

In the UK, employment law recognises three primary categories: employees, limb (b) workers, and independent contractors. While workers and employees are entitled to protections like holiday pay and the National Living Wage, employees enjoy broader rights, such as the ability to bring unfair dismissal claims. Independent contractors, however, fall outside these protections. Bolt, the Estonia-based ride-hailing app, treats its drivers as independent contractors, promoting flexibility and the ability to set their own hours. However, Leigh Day argues that Bolt’s drivers fit the legal definition of workers due to the company’s significant control over key aspects of their work, much like Uber’s drivers.

This legal action follows the pivotal Uber case in 2021, where the Supreme Court ruled that Uber drivers were workers rather than independent contractors. That decision clarified that, despite having flexibility in their hours, Uber drivers were subject to the company’s control over payments and contracts, which eroded their independence. It also reinforced that actual working relationships should take precedence over contractual terms, a move aimed at preventing companies from misclassifying workers through sham contracts—a frequent issue in the gig economy.

Leigh Day contends that Bolt drivers should be similarly classified. They argue that Bolt’s recent decision to offer holiday pay and guarantee the National Living Wage, effective from August 2024, does not address years of unpaid entitlements. The firm seeks compensation for unpaid holiday pay and wage shortfalls from previous years, which remain unaddressed by Bolt. In response, Bolt maintains that its business model allows drivers the flexibility and independence to set their own hours and rates, a setup that many drivers prefer. However, Leigh Day asserts that Bolt’s control over work conditions and pay means drivers are entitled to worker protections under UK law.

The hearing, expected to last three weeks, will hear from drivers about their working conditions. If successful, the drivers could receive significant compensation, and the ruling could spark similar claims from other gig economy workers.

As this case unfolds, it highlights broader trends in the gig economy and the strategies used by platform companies to defend their business models. As noted by James Muldoon, a senior lecturer in political science at the University of Exeter and the Head of Digital Research at the Autonomy think tank, in his 2024 article, companies like Bolt often begin with regulatory activism, lobbying for legal interpretations that align with their interests when they enter new markets. Bolt’s announcement of offering holiday pay and the National Living Wage may be seen as an attempt to placate regulators and avoid larger legal consequences. However, strategic litigation, such as the one currently playing out at the Central London Employment Tribunal, remains a common defensive tactic for platform companies. Bolt, like Uber before it, is attempting to preserve its business model by contesting its classification of drivers as independent contractors.

Labour’s proposed employment reforms could further complicate the situation for companies like Bolt. With a focus on ending exploitative practices like zero-hours contracts and ‘fire and rehire’ tactics, Labour aims to establish clearer distinctions between employment categories in the gig economy. As Muldoon explains, platform companies often adapt their tactics as regulations evolve. If Bolt’s legal defences fail, it may have to consider compromises, such as negotiating with unions or subcontracting drivers, to maintain a degree of distance from its workforce while offering limited employment rights.

Globally, platform companies rarely shut down operations when faced with legal challenges instead opting to adapt or delay compliance. As seen in California, these companies use aggressive legal strategies to carve out exemptions and, if necessary, threaten to withdraw services. As Muldoon points out, such tactics allow companies to preserve their business models and serve as warnings to lawmakers in other jurisdictions to enact similar laws. The outcome of the Bolt case will not only affect UK drivers but also contribute to the growing international debate over how gig workers are classified and protected.

As the gig economy continues to evolve, this case could pave the way for further legal claims from drivers and other workers seeking employment protections. While this shift promises better safeguards for workers, it will undoubtedly increase pressure on both companies and the legal system to uphold these evolving standards, reshaping the landscape of worker rights across the sector.