Worker status and right of substitution


28 October 2021

The Court of Appeal has handed down its decision in a case that considered the employment status of a moped courier, whose contract included a limited right of substitution.

Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514

Facts

The respondent is a courier business that connects couriers with clients though a mobile app. Couriers can either opt to take individual jobs, or sign up for a slot requiring them to be available in a certain area for a certain period of time, for which they are paid a minimum rate of £9 per hour. If a courier has signed up for a slot, they can release it in order to make it available for others. If no one accepts the released slot, the original courier is liable for completing it or else incurs a penalty.

The claimant brought a claim for unfair dismissal against the respondent, alleging that he was an employee and was owed notice pay and other pay arrears. In the alternative, he claimed he was a worker, rather than an independent contractor.

An employment tribunal held that he was a worker, but not an employee. In particular, it held that there was no unfettered right of substitution, which was incompatible with a finding that he was an independent contractor. Once he had signed up for a slot, he was in effect obliged to perform the work personally as there was a risk of negative sanctions if he failed to do so. The EAT upheld the tribunal’s decision. The respondent appealed to the Court of Appeal.

Court of Appeal decision

The Court of Appeal has dismissed the respondent’s appeal, upholding the finding of the employment tribunal that the claimant was a ‘worker’. The key issue for a tribunal to determine is whether a claimant is under an obligation personally to perform the work or provide the services. This is a question of fact for the tribunal to determine, which can only be overturned by an appellate court if the tribunal was unreasonable in reaching its conclusion.

The Court agreed that the app had been devised by the respondent to ensure that the courier turned up for the slots that he had signed up for and carried out the delivery work during those slots. The limited ability that he had to release the slot to other couriers was not a sufficiently broad right of substitution to remove from him the obligation to perform the work personally.

Consequences of this decision

This decision provides further support to the decisions in previous cases where it has been held that without an unfettered right of substitution, there is likely to be a finding of worker status.

From the case law we have already seen in this area, it is rare in practice to find a completely unfettered right. Any business that provides a service and requires the work to be performed to certain standards, with vetting procedures in place, and particularly where there is consistent and visible branding, is unlikely in practice to allow a right of unfettered substitution of its workforce.

These articles are from the October 2021 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact a member of Birketts' Employment Team.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at October 2021.

Author

Liz Stevens

Professional Support Lawyer

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