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Employment Status – Confusion or Clarity?

Meredith Hurst Friday, November 24, 2017

The EAT recently upheld the Employment Tribunal's decision in the Uber case, confirming that Uber drivers are workers and not self-employed. A week later, in response to an application that the Independent Workers Union of Great Britain (IWGB) be recognised by Deliveroo for collective bargaining purposes, the Central Arbitration Committee determined that Deliveroo couriers are self-employed. So what does this mean for the thousands, if not millions of people working in the gig economy in the UK?

The Eat decision in Uber v Aslam and others

The EAT decision in the Uber case was delivered on 10th November 2017 following a hearing in September. The Employment Tribunal had found that Uber drivers were 'workers' during periods when they were available for work with the app switched on, and were entitled to benefit from the provisions of the Working Time Regulations and the minimum wage. Although Uber had argued against this finding, overall the Tribunal found that there were many practical examples within the relationship to support it. The EAT supported that decision. It accepted that the Tribunal had properly unpicked the relationship between Uber and its drivers and correctly established that the drivers were workers and not self-employed.

The Central Arbitration Committee decision relating to Deliveroo

The Deliveroo matter was something of a different beast. While there is an outstanding Employment Tribunal case waiting in the wings, in which 45 Deliveroo riders are claiming the right to the minimum wage and sick pay as 'workers', rather than being 'self-employed', this decision concerns collective bargaining. The IWGB submitted an application to the Central Arbitration Committee to be recognised for collective bargaining in respect of Deliveroo riders (both cycle and motor cycle couriers) in the Camden area of London. The IWGB had previously made a request to Deliveroo for recognition, which Deliveroo turned down. Taking everything into account, and while recognising that many Deliveroo riders did want more employment protection, the CAC decided that the ability for riders to draft in a substitute rider defeated the argument that they were workers.

Definitions of a 'worker' - Trade Union and Labour Relations (Consolidation) Act 1992 v Employment Rights Act

While the CAC was concerned with the definition of 'worker' as contained in s.296 Trade Union and Labour Relations (Consolidation) Act 1992, the Uber case centred on the Employment Rights Act 1996 definition of 'worker' which is subtly different.

In the Deliveroo case, the decision came down to whether s. 296(1)(b) applied:

"In this Act, worker means an individual who works, or normally works or seeks to work-

(a) …

(b) Under any other contract whereby he undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his…"

While different to the 'worker' provision in the ERA 1996, the CAC made it clear that its responsibility was to  "find the true agreement  or the actual legal obligations of the parties" - not to be confused with the parties' expectations, but what was agreed [para 94 of the CAC decision]. Although the IWGB asserted that Deliveroo had changed the contracts to avoid a finding that the riders were workers, the CAC determined that this was irrelevant - what was important was what happened in practice.

The ability to substitute

A reading of the facts found by the CAC, alongside the facts found by the ET in the Uber case, show that there are a number of differences between the way the two organisations (Uber and Deliveroo) manage their supply of drivers/riders. What is striking is that Deliveroo introduced a new contract just before the CAC hearing began which offered far more flexibility to its riders than the earlier contract. Under the new contract, there is no requirement for Deliveroo riders to wear Deliveroo branded clothing or equipment, no restriction on them working for a competitor, and crucially, no restriction on a Deliveroo driver passing a job on to a substitute.

A stark contrast between Deliveroo and Uber

Although the IWGB argued that this was essentially a smokescreen to mask the true nature of the relationship between Deliveroo and its riders, the CAC found that the reality of the arrangement did indeed point to self-employment and not one of worker/employer.

Uber on the other hand retained a significant degree of control over its drivers - as we explored in our previous blog on the subject. Uber also specifies that the right to use the app by Drivers is non-transferable, and that Drivers cannot share accounts or allow someone else to log on using their details [para 39 of the ET decision]. This contrasts starkly with the Deliveroo position. Deliveroo riders were allowed to pass jobs on to a substitute under the agreement with Deliveroo - and the CAC heard evidence of this working in practice, with the knowledge and agreement of Deliveroo.

What's next for employment status?

It remains to be seen what the Employment Tribunal will make of the claims by Deliveroo riders that they are entitled to national minimum wage and holiday pay. It's interesting to note that the riders involved in the Employment Tribunal claim (which will be heard in July 2018) work in different areas to those involved in the CAC application. Deliveroo allows different contracts to apply in different areas, so it may be that the ET reaches a different decision on the Employment Status of those riders.

Uber are going to appeal the EAT's decision, and the Supreme Court is due to grapple with the concept of employment status in the context of the Pimlico Plumbers case, so there may be more to come. What is clear, certainly for now, is that the question of 'personal service' - and whether someone can pass work on to a substitute - is a vital part of determining employment status.

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