The Employment Appeals Tribunal (‘EAT’) upheld the decision of the Employment Tribunal (‘ET’) that a substitution clause in a delivery driver’s contract did not deny him worker status.
- The Law
Under UK employment law there are three main categories of employment: an employee, a worker and a self-employed person. Each category is entitled to different levels of employment rights. A worker is someone who is contracted to provide services or who personally performs work or services other than when the status of the other party is one of client or customer. Workers are entitled to a range of employment rights including paid holiday and to receive the national minimum wage.
A key factor to consider in determining worker status is whether the individual undertook to personally perform work or services under a contract, rather than have a right to substitute another person to do the work. If this right to substitute work is contained in their contract, there is no requirement to carry out work ‘personally’ and an individual may be self-employed rather than a worker.
The Claimant worked as a courier and undertook fixed hour ‘slots’ for the Respondent. During the slot, the Claimant was unable to leave the zone he had agreed to operate in and was required to undertake the deliveries offered to him through an app, for a guaranteed hourly rate of £9 an hour.
It was possible to release a slot through the app, however if no other courier accepted it then the Claimant was bound to either undertake the slot or face penalties. Penalties include an impact on performance related bonuses, downgrading performance scores and being suspended from accessing the app.
The Claimant brought various claims including for unlawful deduction of wages and holiday pay. The Respondent argued that he was neither an employee nor a worker, but self-employed due to ability to substitute a slot to other couriers. The ET held that this ability was not of the character of a substitution clause and the Claimant did therefore have worker status. The Respondent appealed.
The EAT agreed with the ET and dismissed the appeal. They agreed with that the ability to release a slot through the app did not amount to an unfettered right of substitution and highlighted that the Claimant had no control or knowledge over who would accept the slot.
This ability was therefore ‘merely a right to hope that someone else in the pool will relieve you of your obligation’, rather than have an effect of negating the element of personal performance and denying the claimant worker status.
- Implications for Employers
The above decision was dependent on the facts; however it highlights the importance of ensuring that any contract clause in an individual’s contract has been drafted properly and to consider what happens in practice when seeking to rely on this. The case is also a reminder of the impact that the employment status of an individual has on your obligations as an employer and it is essential that this determination is correct.