Employment status and the gig economy

17 January 2017

In the first of four soon to be heard employment cases against courier companies (according to the BBC: Addison Lee, Excel and E-Courier), an Employment Tribunal has decided that a cycle courier working for City Sprint was a worker under section 230(3)(b) of the Employment Rights Act 1996, and not a self-employed contractor. The courier succeeded in her claim for two days’ holiday pay. The decision follows the ruling against Uber in October 2016.

Following a recruitment process, couriers are “awarded” with notification that they have successfully tendered to provide courier services. Under the arrangement they are termed as ‘self-employed contractors’ and ostensibly treated accordingly. The terms provide that:

1. there is no mutuality of obligation;
2. there is a right of substitution (by the individual courier);
3. unless the courier works they will not get paid;
4. there is no entitlement to holiday, maternity or sick pay; and
5. they are paid per job.

The tribunal found that the terms of the “Confirmation of Tender” document did not reflect the true relationship between the parties (e.g. in practice couriers do not submit invoices and City Sprint automatically calculates payments due and pays them weekly in arrears, after deductions). As such, the ET went behind the terms of the contract to look at the relationship in practice. They found Ms Dewhurst:

1. was required to log into and out of the company’s Citytrakker tracking system at the start of and the end of the day;
2. wore a uniform;
3. was expected to work when she said she would;
4. was directed by a controller (through radios and mobile phones); and
5. had little autonomy to determine the way the services were performed.

The ET held that Ms Dewhurst had been recruited by City Sprint to work for it, and was integrated into the business. Accordingly (and very importantly) Ms Dewhurst was a worker during periods when she was logged into the Citytrakker system. The Employment Judge, described City Sprint’s contractual arrangements as “contorted”, “indecipherable” and “window-dressing”.

The case offers nothing new in terms of law, but it is part of a growing wave affecting the so-called “gig economy”.

Please see here for an introductory analysis of the categorisation of employees, workers and the genuinely self-employed.

If you would like to talk with someone in our team about the issues raised then please contact us.