The Watford Employment Tribunal asked the Court of Justice of the European Union (CJEU) whether the UK test to decide whether someone is a ‘worker’ was compatible with the Working Time Directive under EU law. In answering this, the CJEU has provided useful clarity on when a self-employed contractor will be classified as a ‘worker’.
‘B’ was a courier and engaged as a self-employed contractor for Yodel. He used his own vehicle to make the deliveries and communicated with Yodel through his own mobile phone. The contract stated that couriers may appoint a substitute for deliveries, provided they had suitable qualifications accepted by Yodel. In any event, the courier remains personally liable for any acts or omissions of any appointed subcontractor or substitute. The courier is not under any obligation to accept jobs from Yodel and Yodel is not contractually obliged to provide them with work. Deliveries must be made between hours set by Yodel but the courier is free to the time of delivery and the appropriate order and route to suit their personal convenience and they are able to work for other delivery companies at the same time.
‘B’ claimed that despite being engaged as a self-employed independent contractor, he was a ‘worker’ under the Working Time Regulations 1998. Under UK law, the status of ‘worker’ presupposes that the person concerned undertakes to do or perform personally any work or service. In deciding on this issue, the Watford Employment Tribunal considered the substitution clause in the courier’s contract allowing someone else to undertake the work on their behalf as well as the ability to work for third parties simultaneously. The tribunal were concerned that this personal service requirement was not compatible with EU law and therefore asked the CJEU for a preliminary ruling in relation to the meaning of ‘worker status.’ Under the EU directive.
The CJEU decided to provide a reasoned order, rather than a judgment in relation to this question. It was noted that a worker was defined in the Working Time Directive. It has however been established through case law that the essential feature of an employment relationship is that a person performs services for and under the direction of another person in return for remuneration. The court also highlighted that the “classification of an ‘independent contractor’ under national law does not prevent that person being classified as an employee, within the meaning of EU law, if his independence is merely notional, thereby disguising an employment.”
The court summarised that someone engaged as a self-employed independent contractor will not be a ‘worker’ under the directive where they are afforded discretion:
- to use subcontractors or substitutes to perform the service which he has undertaken to provide; to accept or not accept the various tasks offered by his putative
- employer, or unilaterally set the maximum number of those tasks; to provide his services to any third party, including direct competitors of the putative employer, and
- to fix his own hours of ‘work’ within certain parameters and to tailor his time to suit his personal convenience rather than solely the interests of the putative employer.
This will only be the case however if the independence of that person does not appear to be fictitious and, if it is not possible to establish the existence of a relationship of subordination between that person and their employer.
Although the CJEU held that the employment tribunal must make the final determination, it did note the ‘great deal of latitude’ ‘B’ had in this case, that his independence did not appear to be fictious and the lack of a subordinate relationship between him and Yodel, indicating ‘B’ did not have worker status.
- Implications for employers
Knowing the employment status of all individuals working within an organisation is crucial for all employers as this impacts your obligations as well as the rights afforded to the individual. Although the employment tribunal is yet to make a final decision in this case, the CJEU has outlined the key factors that will assist in making this determination and confirmed the consistency of UK with EU law on this issue.