Case update (1): Employment status

There has been a recent spate of cases which may cause a headache for employers reliant on independent contractors as an integral part of their businesses. As the Court of Appeal noted in the next case of Pimlico Plumbers & Charlie Mullins v Gary Smith, the case ‘puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker.’

 

1. Gig economy – Cycle courier

What do we already know?

In our November 2016 Newsflash Uber drivers are ‘workers’, we updated you on the Tribunal decision in Mr Y Aslam, Mr J Farrar and Others v Uber,  that two drivers who provide services to the online taxi firm, Uber, are ‘workers’ and therefore entitled to be paid the National Minimum Wage and other rights as described in that Newsflash.

We also commented that although this decision was fact-specific, and based on Uber’s business model, it had helped increase the chance of other ‘gig economy’ companies facing claims that their ‘contractors’ have worker status.

What’s new?

In the case of Dewhurst v CitySprint UK Ltd, available here, the Tribunal awarded ‘worker’ status to a cycle courier who claimed that she was entitled to holiday pay.  This follows the case of Uber, highlighted above, and is a further example of the direction of travel in respect of gig-economy employment status.

Facts:  Ms Dewhurst was a cycle courier for CitySprint, which engages 3,200 self-employed couriers in Great Britain. She worked around four days per week in London, carrying out a series of courier jobs, wearing CitySprint uniform. Her contract stated that she was a self-employed contractor. However, she disputed this and brought a Tribunal claim for holiday pay on the basis that she was instead a ‘worker’.

The Tribunal considered the contract and the reality of the situation which was that CitySprint:

• allocates courier jobs via a centralised tracking system;
• ensures controllers and couriers remain in contact via radio and mobile phones, once the courier logs onto the tracking system;
• states that it pays couriers ‘per job’ but in fact couriers receive payment in arrears on a weekly basis, without having to submit an invoice for the jobs that they had completed;
• specifies that couriers are not obliged to provide work and if the courier does not work, then they will not be paid;
• allows couriers to send substitutes; but in reality, the restrictions imposed are such that a substitute could really only be another CitySprint courier, rather than someone of the courier’s own choosing;
• takes couriers through a rudimentary disciplinary process if they are rude to customers and ultimately couriers can be removed and replaced; and
• decides if couriers can go home: when Ms Dewhurst wanted to finish early because she was feeling unwell, she was told she could not do so because no-one else could be found to cover a job.

Having taken the above factors into account, the Tribunal thought that it was clear that Ms Dewhurst was in fact integrated into CitySprint’s business.

The Tribunal concluded that when CitySprint said that their couriers ‘make their services’ available to them, this was ‘window dressing’ and that Ms Dewhurst was in fact a worker, who worked during the hours that she was logged on to the CitySprint system (rather than by reference to the days that she worked). The Tribunal awarded her two days’ holiday pay. The Tribunal emphasised some key factors to take note of, including that Ms Dewhurst:

• was both economically and organisationally dependant on CitySprint, and was working for them rather than for herself;
• lacked autonomy to determine the manner in which she performed services and had no chance to dictate the terms; and
• was not providing services to anyone else.

Implications:   This decision serves as a further reminder to employers that there is a trend emerging whereby the status of individuals engaged in the gig economy is being challenged in the Courts.  Also that Courts and Tribunals will look behind what is in the written terms and examine the reality of the situation when deciding employment status.

Both Uber and this case are Tribunal decisions and therefore do not need to be followed by other Courts and Tribunals.  However, Uber has recently appealed to the EAT so watch this space…