Employment and Immigration Law Update – Worker status of cycle couriers

In this case, an employment tribunal considered whether cycle couriers were self-employed or ‘workers’, in the context of a claim for holiday pay.

O’Eachtiarna and others v CitySprint (UK) Ltd [2020], ET/2301176/2018

Facts

This was a group of five lead cases from a larger holiday pay claim brought by cycle couriers. In a previous case, a tribunal had held that a courier engaged under a previous contract was a worker within the meaning of the Employment Rights Act 1996, meaning that she was entitled to receive holiday pay. CitySprint changed their contractual terms in November 2017, with the intention of clarifying the rights and flexibilities available to its ‘self-employed couriers’.

However, the couriers claimed that as very little had changed in relation to their working arrangements in practice, they should still be regarded as workers.

Tribunal decision

The tribunal did not accept the couriers’ submission that since CitySprint had conceded worker status prior to November 2017, and that little had changed in practice since then, they should necessarily be regarded as being ‘workers’. The contractual provisions were important and should not be overlooked.

The tribunal considered that most of the contractual terms reflected reality and were clear. However, the contractual right of substitution was only a theoretical right; it had never been exercised. The dominant feature of the contract remained personal performance. Most of the couriers did other work, but did not work elsewhere as a cycle courier. The tribunal therefore concluded that the couriers were ‘workers’ whilst engaged in work for CitySprint and were entitled to receive holiday pay.

Consequences

It was well-publicised back in 2017 that CitySprint were seeking to establish self-employed status of its couriers by introducing new contractual terms. Following this decision and subject to any appeal, this strategy has failed to succeed. Changing contractual terms without a corresponding change in operational procedures was insufficient to defeat a claim of worker status.

A provision in the contract stating that any fees paid would be deemed to include holiday pay (at the minimum statutory rate), if the couriers were found to be entitled to holiday pay, also failed to succeed. No specific sum had been identified as holiday pay and the contract provided no mechanism for the calculation of holiday pay, meaning that the contractual provision was not sufficiently transparent or comprehensive to be valid. The tribunal is due to determine the appropriate remedy at a later hearing.

These articles are from the August 2020 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 Liz Stevens or another member of Birketts’ Employment Law Team.