Following hot on the heels of the Uber decision, a tribunal has now held that a bike courier is a worker, and entitled to paid holidays from the courier company.

Employees, workers and self-employed – why does it matter?

UK employment law provides different levels of protection for employees, workers and self-employed contractors.

  • Workers don’t benefit from the full range of rights available to employees (in particular, the right not to be unfairly dismissed).
  • Workers have more employment rights than self-employed contractors – including the right to receive the minimum wage and paid holidays.

At the start of the case, the bike courier claimed she was both an employee and a worker of the courier company, but later abandoned her ’employee’ claim.

How did the bike courier work?

When the courier started work each day, she would speak to a courier company controller and log into a system called “Citytrakker”. Citytrakker (operated by the courier company) tracks couriers’ whereabouts and helps allocate courier jobs. The courier also used a radio and her own mobile phone to keep in touch with the company’s controllers throughout the day.

The courier’s contract (titled “Confirmation of Tender to Supply Courier Services”) described her as a self-employed contractor. It included provisions that are often viewed as “indicators” of self-employment, including that:

  • The courier could determine the manner in which jobs were performed, including the route.
  • The company was not obliged to offer her work at any time, and the courier had no obligation to accept any particular job allocated to her.
  • The courier could accept work from other organisations whilst carrying out jobs for the courier company.
  • The courier could provide a substitute to perform any particular job (provided they fulfilled certain criteria).

Why did the tribunal find that she was a ‘worker’?

The tribunal stressed that simply labelling someone as self-employed does not mean they are – what counts is the practical reality. It had “no doubt” the courier was not self-employed, but that she was a worker. It found that, despite the terms of the contract, in practice she:

  • Could not determine how jobs were performed (for example, she was instructed to greet customers in a particular way, wear approved uniform, and follow instructions on what to do if a particular parcel could not be delivered).
  • Could not pick and choose the jobs she carried out when she was working.
  • Could not accept and undertake work for others at this time.
  • Would find it very difficult to appoint a substitute (other than swapping jobs with other couriers of the courier company).

Another warning?

In Uber, the employment tribunal observed that “any organisation… resorting in its documentation to fictions, twisted language and even brand new terminology, merits… a degree of scepticism”.

This case is a further reminder that tribunals look at the reality, regardless of what the contract says.

Review your own arrangements

Employment status looks set to be a key issue for 2017: look out for an appeal in Uber, and more tribunal decisions. The government is also taking stock via its review of Employment Practices in the Modern Economy and inquiry in the Future World of Work and Rights of Workers.

Wrongly classifying an individual as self-employed could lead not only to employment tribunal claims, but also potential liability for tax and national insurance with added interest and penalties.

It is possible to devise a business model whereby individuals are genuinely self-employed contractors, but this cannot be achieved through documentation alone: it must be reflected in the practical reality.