Employment status, "self-employed" couriers classed as "workers" by the appeal courts

Back in November last year we wrote on the decision in the case of King v Sash Windows, and the subject of the rights of “workers” that had previously been incorrectly regarded as self-employed. As an issue in employment law, this is one that has seen significant developments in recent years, involving a number of well known names, such as Uber, and Deliveroo.

Couriers and drivers in particular have increasing been engaged ostensibly as “self-employed” workers. There are clear practical benefits for the individuals concerned, as it can afford them a level of flexibility that they may not otherwise have as a traditional “employee.” Businesses have seen the practical and financial advantages of these arrangements, seeking to limit their tax responsibilities, and rights such as maternity leave and statutory sick pay, etc.

The recent case of Addison Lee Ltd v Gascoigne is another case that illustrates that the individuals actually have broader employment law rights than they (and the business engaging them) had first thought. The case also highlights the legal differences in the rights and responsibilities associated with different types of working arrangements, and in particular sheds some light for businesses on the status of those individuals that are classed as “workers” but not as fully entitled “employees.”

Addison Lee Ltd is a business which provides private-hire taxis to businesses and individuals, working with around 400 drivers and a small courier business with around 500 couriers using motorcycles, cars, vans and bicycles. The service seeks to provide speedy delivery, usually within an hour, to its customers. Controllers allocate jobs, tracking their progress by radio and GPS and dealing with queries. The courier is provided with a radio and palm top computer/XDA and an app, and a GPS tracker. The couriers are also provided with branded bags and t-shirts, but their use is not enforced, but they must carry Addison Lee ID on them. 

The method of work involves the individual contacting the controller on duty and logging on to the system. From then they are in constant touch and the controller can see the whereabouts of the individual. The individuals are provided with written contracts which stated, “You agree that you are an independent contractor and that nothing in this agreement shall render you and employee, worker, agent or partner of Addison Lee and you shall not hold yourself out as such”. The terms go on to state that the individual can “choose the days and times when you wish to offer to provide the Services.” Furthermore, the terms state that there is “no obligation on you to provide the Services to Addison Lee or to any Customer at any time….”

The case brought in the Employment included a claim for holiday pay. This is a right that is governed by the Working Time Regulations. These Regulations define two distinct groups of people that enjoy the benefits of the Regulations. The first group are employees. It is the second group which was discussed in this case, and which causes problems for many businesses. This second group includes any individual that entered into work under “any other contract, whether express or implied and whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract” other than as a customer or client or business. This is the basis of the right to holiday pay for “workers.”

In the Employment Tribunal it was ruled that the Addison Lee couriers were “workers.” Therefore, they had a right to paid holiday from Addison Lee.

Addison Lee appealed against the decision that the couriers were workers on two distinct grounds, namely that the Tribunal had made a mistake in deciding that there was a sufficient level of mutuality of obligation, and secondly that the Tribunal had made errors in it multi-factorial assessment of the couriers work.

The Employment Appeal Tribunal (EAT) rejected both elements of the appeal from Addison Lee. It ruled that Mr Gascoigne was a “worker”, and so was entitled to holiday pay. The EAT concluded that once Mr Gascoigne logged on to the app he was a sufficient level of mutual obligations between him and Addison Lee. It was noted that the fact he could log off the app at any time did not alter his obligation to accept work when he was actually logged on. Looking at the second matter the EAT said the Tribunal had been right to look at the reality of the situation and relationship between the parties. The Tribunal had noted that once Mr Gascoigne had accepted a job it was only in exceptional circumstances that the job was then declined. The Tribunal had correctly observed that “The expectation on both sides was that if was given a job he would do it.”

The case points the way in which the wind is moving in this area. It also shows that the Tribunals are increasingly prepared to examine the practicalities and realities of working relationships when deciding which label to apply to the relationship. This case also highlights the risks that businesses face in ignoring the implications of the hybrid status of “worker” which gives more rights to the individuals than applies to self-employed staff but less than “employee” The wording of the contract is not totally ignored, but this case illustrates the fact that Tribunals will look at the actual working relationship, and that evidence will be preferred to the cold reading of the words of a written contract. Businesses need to be aware that if they have got the wrong label for their staff, they run a risk of a significant liability for holiday pay developing for each such “worker."    

If you need any further advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.