“Worker” Status: A Fresh Warning for the Gig Economy
The news that Uber’s drivers are entitled to some basic employment rights made the headlines a few months ago and now the courier business, CitySprint, has found itself on the receiving end of a similar Employment Tribunal Judgement which held that one of its bicycle couriers is a ‘worker’ and not genuinely self-employed, despite contractual documents which described her as just that.
In the CitySprint case, the Employment Tribunal Judge appears to have been unimpressed with the contractual arrangements that CitySprint put in place describing them as contorted, indecipherable and window dressing. As such, it is perhaps no surprise that they went on to find that the courier in question was a worker.
But what exactly is a ‘worker’ and how is it any different to being an ‘employee’?
Most people are familiar with the idea of a person being either an employee or self-employed, but what many people do not appreciate is that there are a group of people who fall somewhere in-between these two extremes. They aren’t self-employed in the true sense but neither are they employees. These people are known as ‘workers’ and have the benefit of some of the employment rights which an employee would have, such as the right to receive the national minimum wage and paid holiday.
Rather unhelpfully, the definitions of ‘employee’ and ‘worker’ vary slightly between different pieces of legislation but the most often referred to definition of a ‘worker’ can be found in the Employment Rights Act. That defines a worker as anyone who has entered into or works under a contract of employment or any other contract where the individual agrees to do work personally for another party but which is not a contract between that individual’s business and a client.
A good example of someone who might be a ‘worker’ but not an ‘employee’ would be someone working through a temporary work agency. Such a person may enter into a contract to provide their services personally to a company who needs an extra pair of hands, but if there is no obligation on that company to provide work to the individual and no obligation on the individual to actually do the work when it is offered (such ‘mutuality of obligation’, as it is known, would be necessary to establish an employment relationship) then the individual is likely to have ‘worker’ as opposed to ‘employee’ status.
Uber’s drivers successfully argued that they were workers because, amongst other things, they were able to show that Uber exercised a lot of control over the client journey booking system, they took and administered payment from the passengers and, significantly, would penalise drivers who received poor passenger feedback or who failed to accept bookings when they were offered. The drivers undertook to do the work personally and were not permitted to provide a ‘substitute’ driver.
In the CitySprint case, the courier was expected to work when she said she would, had to wear a company uniform, was given directions by the company throughout her ‘working time’ and was told when she would be paid and how much as opposed to submitting invoices. In both cases the Employment Tribunal felt that the level of control, integration and personal engagement meant that the drivers and couriers could not be said to be genuinely self-employed.
As both of these cases are only decisions of the Employment Tribunal they are not binding on future Tribunals and it is likely that both cases will be appealed. However, these cases illustrate a willingness of Tribunal Judges to closely analyse any purported ‘self-employed’ status and the, sometimes scathing, language used in the judgements of each case suggests that Tribunal Judges have little time for employers who may be trying to avoid offering their staff the benefits to which their workforce are entitled.
Businesses like Uber and CitySprint who operate in the ‘Gig Economy’ need to take heed of these recent decisions and think very carefully about whether the status of their workforce could place them at risk of similar Employment Tribunal cases.
If you would like any more information on worker and employee status or how these cases might impact on your business please contact Sally Nesbitt on 01628 470014 or firstname.lastname@example.org