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Published 16 July 2021
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Employment “Worker” Status Update

Employment status and what gives someone “worker” status continue to be an issue for tribunals and lawyers alike.

The rights of a worker

You will recall that if a claimant can establish that they have worker status they will be entitled to various employment rights which include payment of the National Minimum Wage/National Living Wage, an itemised pay slip, working time rights, protection from discrimination, and from unlawful deduction from remuneration, Health and Safety protection, auto-enrolment on to a pension scheme and paid annual leave.

Definition of a worker

There have been a number of cases over the last few years which have sought to define what amounts to worker status, the headline case being the decision of the Supreme Court earlier this year which unanimously decided that drivers engaged by Uber are workers rather than independent contractors.

The Uber case

The Supreme Court in the Uber case pointed out that tribunals should focus on the reality of the relationship and not be bound by what the documents say. The Supreme Court went on to find that Uber drivers did have worker status from the moment they switched on the App and were available to work until they switched off at the end of the day. As such, the drivers were entitled to a minimum wage, annual leave and whistleblowers’ rights but they did not have employment status and therefore did not have redundancy or unfair dismissal rights. 

Identifying worker status

As a starting point, a person is generally classed as a ‘worker’ if:

·        they have a contract or other arrangement to do work or services personally for a reward (the contract doesn’t have to be written)

·        they only have a limited right to send someone else to do the work

·        they have to turn up for work even if they don’t want to

·        their employer has to have work for them to do as long as the contract or arrangement lasts

However, with an ever-developing gig economy, the reality of working out who has worker status is rarely straightforward.

Two recent updates 

1.     Addison Lee. In the recent case of Addison Lee v Lange, the Court of Appeal confirmed the Employment Tribunal’s finding that Addison Lee drivers are also workers and found that the Uber case confirmed that a tribunal should disregard any contractual provision that does not reflect the reality. The drivers’ contracts with Addison Lee stated they were ‘independent contractors’, who were allocated jobs when they logged onto Addison Lee’s system.

The Court of Appeal found that it was an ‘unappealable finding of fact’ that an Addison Lee driver undertook to accept jobs allocated to them when they were logged on and that the drivers had an express contract with Addison Lee that negated any mutuality of obligation as they could be subject to sanctions for refusing jobs.

2.     Deliveroo. Delivery riders for Deliveroo work under non-negotiable ‘supplier agreements’ in which drivers are described as independent contractors, with no obligation on Deliveroo to provide work and no obligation on the rider to be available at any time or to accept jobs.

However, a key point of significance is that the agreements also allow riders to provide a substitute, who may be employed or engaged directly by the rider, without need for approval by Deliveroo.

 In November 2016, the Independent Workers Union of Great Britain applied unsuccessfully to the Central Arbitration Committee (CAC) to be recognised for collective bargaining in respect of a group of Deliveroo riders. The issue turned on whether Deliveroo riders fall within the scope of the trade union freedom right under Article 11 of the European Convention on Human Rights. The Court of Appeal held that Deliveroo riders do not fall within the scope of Article 11 because to do so depends on the existence of an employment relationship and Deliveroo riders are not in an employment relationship with Deliveroo (thereby upholding the High Court’s decision).

This issue of whether there was an employment relationship turned on whether there was an obligation of personal service bearing in mind the contractual right for drivers to send a substitute. The Court of Appeal acknowledged the fact that work must be carried out personally by the worker as an indicator of an employment relationship as well as the fact that the absence of such an obligation must be a contra-indicator of worker status. The Court did not believe that the question of how often in practice the driver exercised the right to provide a substitute was relevant, save that it might be relevant to the question of whether the right is genuine.

Watch this space

This is unlikely to be the end of litigation on the subject of worker status and businesses will need to keep a watchful eye on these slightly piecemeal developments to ensure they remain compliant. What continues to be clear is that the tribunals and courts will take a robust look at the reality of the working relationship and practices, rather than accepting any contractual descriptions.

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