In the latest case on worker status, an Employment Tribunal held that a cycle courier was a worker, not a genuinely self-employed independent contractor, and so was entitled to statutory paid holiday.
Mr Gascoigne worked as a cycle courier for Addison Lee. His contract stated that:
- he was "an independent contractor";
- nothing in the contract would render him an employee, worker, agent or partner of Addison Lee, and that he must not hold himself out as such;
- for bookings with Addison Lee account holders, he would act as a sub-contractor for Addison Lee delivering to its customers;
- for non-account bookings, Addison Lee was a "disclosed agent", concluding contracts on his behalf with the customers;
- he could choose the days and times he would be available but there was no obligation on Addison Lee to offer work or on him to accept it when offered;
- he would be deemed to be available and willing to provide work at any time that he was logged into an Addison Lee palmtop computer or app;
- he indemnified Addison Lee against any liability resulting from any claim made by him based on employee or worker status.
Mr Gascoigne's working pattern was variable, and he took advantage of the flexibility. He would generally pre-book holiday, although there were no formal consequences if he didn’t do so. The couriers were paid a piece rate determined by Addison Lee, which they could not negotiate. They were also paid a fixed fee for waiting time, and had sums deducted weekly in respect of insurance and an "admin" fee.
When a courier was working, they would log into the app and contact the controller at Addison Lee. Once logged in, they could not decline work via the app, but would have to contact the controller who would reallocate the job.
The Employment Tribunal held that Mr Gascoigne was a worker, and that his claim for holiday pay was well founded. The contractual documentation did not accurately reflect the reality of the relationship, which was that he was obliged to perform work personally for the company under its control, and was subject to a "classic wage/work bargain".
Factors pointing towards worker status were:
The contract did not accurately reflect the working relationship. He had neither read nor negotiated the contract, did not know or understand the terms he worked under, and was vulnerable and in need of protection;
There were no signs that the company behaved like "agents" in relation to non-account customers. For example, they frequently paid Mr Gascoigne even if the customer cancelled a job or failed to pay. His financial risk was only theoretical;
There was an obligation of personal service, which pointed towards worker status;
The company set the rates of pay;
The company managed all payments, and issued a weekly "Combined Invoice/Statement" which was a payslip in all but name;
Couriers were never marketed by name to customers and customers rarely requested a named courier. The business model was that the service was provided by the fleet as a whole. Mr Gascoigne was part of a "homogenous fleet and a homogenous operation which promoted Addison Lee to customers and looked after its own."
Mr Gascoigne was registered self-employed and paid his own tax and national insurance, but this was not incompatible with worker status.
What does this mean for employers?
This is the latest in a string of claims about worker status and the "gig economy". An appeal in the Uber case (see our alert here) is due to be heard at the EAT later this month.