Taxi firm Addison Lee has lost an appeal case brought against it by a group of British drivers who wanted to be recognized as workers rather than self-employed contractors.

The employment tribunal that heard the case ruled the drivers are entitled to holiday pay and minimum wage.

This is a big blow to the taxi firm, which could face a bill of over £39million, in back payments on holiday pay and raising wages up to the national minimum wage for 3,800 drivers.

Last September, a British court ruled that some drivers were not self-employed, giving them few entitlements under the law and leading to Addison Lee’s appeal on the matter.

Driver unions argued that the gig economy is exploitative due to the lack of fixed contracts. Firms on the other hand argue that drivers take home more than the minimum wage and have more flexibility.

Sue Harris, GMB union's legal director, said: “This is another huge win for GMB over bogus self-employment.

“Once again, the courts have agreed Addison Lee drivers are legally entitled to workers' rights such as the national minimum wage and holiday pay rights. Other employers should take note - GMB will not stop pursuing these exploitative companies on behalf of our members.”

Liana Wood, solicitor at Leigh Day who represented the drivers on behalf of the GMB, said: “We are very pleased that the EAT has rejected Addison Lee's appeal. It is clear that Addison Lee's business model of providing a fleet of highly trained, regulated drivers is incompatible with their arguments that drivers are not workers who are entitled to workers' fundamental rights.

“We hope that Addison Lee will accept this decision; drivers shouldn't have to continue to work very long hours, often in excess of 60 hours per week, to earn just enough to meet their basic living costs.”

Michaell Lange, one of the drivers who brought claims against Addison Lee, said: “We decided to bring this claim in 2016 because we wanted Addison Lee to treat drivers fairly. We are happy that the decision that we were workers for Addison Lee has been upheld.

“We now urge Addison Lee to do the decent thing and stop denying its workforce of over 4,000 drivers their rights.”

Addison Lee has the right to take the matter to the court of appeal.

It said in a statement: “We note the appeal verdict, which we will carefully review. Addison Lee is disappointed with the ruling as we enjoy a positive relationship with the vast majority of our 3,800 driver partners.

“In common with most of the industry, the majority are self-employed, and with earnings at a record high."

Uber has also been battling a similar case for years.

By Airport Pickups London