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November 30, 2021

Self-employed or worker? Where an individual can substitute another to provide a service, they may still be considered a worker

Self-employed or worker? Where an individual can substitute another to provide a service, they may still be considered a worker

Date updated:

In Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514 a courier’s right to substitute another to do their shift did not mean they were self-employed for the purpose of claiming certain employment rights as a worker including the right to national minimum wage, and protection against unlawful deduction from wages which Augustine claimed in Stuart.

Whether an individual is a worker (with certain employment rights), or self-employed turns on a range of factors to be considered in light of the factual matrix as to what happens in practice.

One such factor is whether the individual must perform the work personally (provide personal service) which is an indicator of worker or employment status, or whether they may appoint a substitute, which is an indicator of self-employed status.

Mr Augustine worked as a courier for Stuart Delivery. Stuart offered time slots which its couriers could sign up to. The time slots required couriers to be available in a specified area for a specified time. If a courier could no longer do a time slot they signed up for, they could advertise the slot to another Stuart courier, however if another courier didn’t accept the slot the courier had to complete the slot or face penalties.

The Employment Tribunal concluded that Augustine was a worker (but not an employee). The right to advertise a time slot to another courier did not amount to an unfettered right of substitution, Augustine would only be released from his obligation to undertake the slot if another courier signed up, and he had no control over whether this happened.

Stuart appealed to the Employment appeals Tribunal, which agreed with the Employment Tribunal and then to the Court of Appeal.

The Court of Appeal dismissed the appeal, and confirmed that the Employment Tribunal as correct to conclude that Augustine was a worker.

It referred to the Employment Tribunal’s decision that a courier’s limited ability to offer their slots to other couriers:

"was not, in reality, sufficient right of substitution to remove from him that personal obligation to perform his work personally for the Respondent".

The Court of Appeal also confirmed that when considering whether there was an obligation to provide personal service, it is necessary to look at the contractual terms as well as the way in which the arrangements operated in practice.

The decision in Stuart is significant for two reasons.

Firstly, it indicates that a right of substitution is unlikely to defeat a finding that an individual is required to provide personal service if that right is fettered. This is not a new law and follows previous cases, however the case provides an up-to-date and current example of a right of substitution which in practice was not sufficient to negate a finding that the courier was required to provide services personally.

Secondly, the decision reiterates that contractual provisions alone will not confirm an individual’s employment status, how arrangements operated in practice are highly relevant to determining an individual’s employment status and whether they are an employee, worker or self-employed.

Employers and self-employed individuals often attempt to classify their relationships as self-employed through contractual agreement. The decision in Stuart is a reminder from the courts that employment status is not determined by reference to the contractual relationship alone and so employers and self-employed individuals must consider how their relationships work in practice and ensure that practically their relationships reflect the status they wish to achieve, whether that is employee, worker or self-employed.