In the past few months, I have blogged about two individuals – a bike courier and a plumber – who both persuaded employment tribunals that they were workers (and so were entitled to certain benefits such as paid holidays). There has also been a large amount of press coverage about the two Uber drivers who successfully claimed worker status last autumn (a decision which has been appealed).

Following hot on the heels of those decisions, the London Central employment tribunal has upheld another bike courier’s claim that he was a worker of the courier company Excel. As in the previous cases, the tribunal rejected Excel’s claim that that the courier was a self-employed contractor.

To recap: employees, workers and self-employed – why does it matter?

The key reason for disputes about employment and worker status is that 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.

This means that for an individual, depending on the circumstances, there can be a real value in establishing that they are an employee or worker.

Deciding the bike courier’s status

The bike courier in this case had a written contracts with Excel, which described him as a “contractor” and “subcontractor”. As in the previous bike courier case, however, the employment tribunal stressed that simply labelling someone as self-employed does not mean they are – what counts is the practical reality. The tribunal found that in practice the bike courier was not running his own business and was in fact working under Excel’s direction. Following on from this, the tribunal held that the bike courier was a worker and was entitled to receive paid holidays.

In reaching its decision, the tribunal noted that the bike courier:

  • Had to work five days per week, nine hours per day.
  • Had to keep himself available for work throughout those five days per week.
  • Could only change his hours (or have time off) after giving Excel advance notice and obtaining Excel’s agreement.
  • Carried out his work for a fixed tariff set by Excel.
  • Would find it difficult in practice to appoint a substitute to carry out his work.

Another warning?

A key aspect of the case was that Excel (who are in liquidation) did not take part in the employment tribunal hearing or provide any witness evidence in relation to the dispute. The case is still further proof, however, that employee and worker status is very much a hot topic at the moment. Following on from the previous cases mentioned above, it also seems that there is a definite “momentum” in terms of individuals successfully persuading tribunals that they should be recognised as workers, rather than self-employed contractors.

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. Brodies’ Employment and Tax teams can work with you to identify any risks and strategies for the future.