The concept of joint employment or co-employment is well known to US businesses that supply or engage temporary agency workers. However, it is not a legal concept that is recognized in other jurisdictions, notably the UK, except in rare circumstances.

In the UK, for an individual to be jointly employed by two employers at the same time in respect of the same work, the contract or contracts must specify this is the case or a contract must be implied to give business reality to the workplace relationship.

This was confirmed recently by the Employment Appeal Tribunal in United Taxis Ltd v Comolly and another when it concluded that a taxi driver could not simultaneously be employed by two different employers in respect of the same work.

Co-employment occurs in US law when two businesses exert some control over an employee’s work or working conditions. The risk arises because those two businesses, typically a staffing firm and its client, jointly incur legal liability for complying with certain employment rights. US federal laws and many state laws specify liability for employers on the basis of joint employment, including the National Labor Relations Act, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964 and the Family and Medical Leave Act.

However, as far back as 1826, a Court of Appeal in the UK found that a coachman hired along with a pair of horses to draw a carriage was “the servant of one or the other, but not the servant of one and the other” referring to the carriage owner and the owner of the horses. According to the EAT in United Taxis, the law hasn’t changed since then.

The case. United Taxis Ltd. is a taxi company operated as a cooperative by shareholders who could engage others to drive their taxis as long as they were a registered driver with United Taxis.

Mr. R. Comolly was a taxi driver registered with United Taxis who was engaged from 2009 by one of United Taxis’ shareholders, Mr. Parkinson. When that relationship ended in 2014, Comolly entered an agreement with another shareholder, Mr. R. Tidman. Comolly was permitted to use Tidman’s taxi between 6 a.m. and 6 p.m. five days per week in return for paying Tidman 50% of his takings. There was no written contract between them, but Comolly was regarded as self-employed. Later, Tidman unilaterally reduced the hours the taxi was available to Comolly by one hour, to between 6 a.m. and 5 p.m. Under United Taxis’ bylaws, Comolly was not allowed to work for another shareholder even if Tidman’s taxi was not available.

A dispute arose between Tidman and Comolly over whether Comolly had been properly declaring his earnings to Tidman, and in March 2020, Tidman summarily terminated the agreement with Comolly for alleged gross misconduct. Consequently, Comolly brought a tribunal claim against both Tidman and United Taxis including complaints of unfair dismissal, unlawful deduction from wages, failure to pay holiday pay and age discrimination, asserting that he was either an employee or worker employed by either United Taxis or Tidman.

Early ruling. The tribunal determined that Comolly was an employee of Tidman and simultaneously a worker employed by United Taxis.

Comolly provided his own work and skill in operating Tidman’s taxi in return for 50% of the fares paid, but he was subject to a material degree of control by Tidman, who stipulated the hours his taxi was available and required Comolly to comply with United Taxis’ bylaws when operating it. Comolly could not provide a substitute driver, and the work received via United Taxis’ iCabbi App amounted to 95% of his working time.

In addition, the tribunal found that Comolly was at the same time a worker employed by United Taxis, despite the fact there was no contract between Comolly and United Taxis, and United Taxis had no control over when and where Comolly worked. However, Comolly’s choice to accept or reject rides was significantly restricted by United Taxis through the information supplied by the app and the time penalties imposed. Comolly also had to comply with United Taxis’ dress code, find work through United Taxis’ shareholders and ensure the taxi displayed United Taxis signage. The collection of fares and any complaints from passengers were managed by United Taxis. From all this, the tribunal determined that a contract between United Taxis and Comolly could be implied and that Comolly was not self-employed.

The reversal. Both United Taxis and Tidman appealed on the basis that Comolly could not be employed by both Tidman and United Taxis at the same time. For this to be the case, as there was no contract between United Taxis and Comolly, the Employment Appeal Tribunal would have to imply the existence of a contract. The Employment Appeal Tribunal concluded there was no business need for doing so to explain their relationship. Comolly was in effect a subcontractor of Tidman.

This case should come as a comfort to clients of UK temporary work agencies that have concerns that they will incur direct liability for employment rights claimed by the workers supplied by such agencies. Dual or joint employment is not a concept that sits well within UK law and is usually confined to those who work within franchise arrangements.

Provided an agency worker has a clear contractual relationship with the agency that supplies them, the responsibility for compliance with all employment rights, with the exception of some health and safety responsibilities, lies with the agency. The only situation in which this might not be the case is if the agency arrangement is a sham, allowing the employer client to avoid their employment obligations. Thankfully, these situations are rare.