In the recent case of Boxer v Excel Group Services Limited, the Employment Tribunal awarded holiday pay to a cycle courier after it found that he was a 'worker' and therefore entitled to employment rights.
Andrew Boxer, started working for Excel Group Services Limited as a cycle courier in September 2013. He brought a claim in the Employment Tribunal on 22 March 2016 for one week's holiday pay in respect of holiday taken (but not paid) between 8 - 15 March 2016, which was valued at £321.16.
Mr Boxer argued that he was a worker and therefore had employment rights, which includes statutory entitlement to holiday pay. In his contract, he was described as a 'subcontractor' and was registered as self-employed with HMRC. He provided his own bicycle, mobile phone and protective clothing, but the company provided him with the radio and palm computer known as XDA (this was later replaced by an App which Mr Boxer installed on his personal phone). However, Excel Group Services also required him to:
- work nine hours a day for five days a week on fixed rates set by him
- be available at all times during the working day
- only take time off or change hours by giving notice to or by agreement with the company
- not agree his own terms with clients
- not bear the risk of cost of damage in transit
This had all the hallmarks of a 'controlling' relationship by the company, as the time-critical nature of the courier jobs required a high level of reliability from its workers in order to run its business effectively.
Mr Boxer argued that if he became less reliable, he would lose his job and was therefore not 'self-employed'. The tribunal had to consider whether or not he was a 'worker' under section 230(3)(b) of the Employment Rights Act 1996 (ERA), as he worked under a contract whereby he undertook to perform work personally. If he was, then he would be entitled to employment rights, including statutory holiday pay.
The Tribunal's Decision
In making its decision, the tribunal applied the judgment of the Court of Appeal in the case of Pimlico Plumbers Ltd v Smith, stating that this was:
"A business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker."
The tribunal decided on the facts that the contract signed with the company did not reflect the reality of the situation. Although Mr Boxer provided his own "tools of the trade", he was not providing his services on his own account as a business undertaking whilst working for Excel Group Services and he was not entering into contracts for his business with clients.
He also enjoyed very little freedom or flexibility in his contractual relationship and he was paid a fixed rate for his work, which was non-negotiable. In light of the facts, the tribunal found that the working relationship, when looked at as a whole, proved that he was a 'worker' under 'limb (b)' of section 230(3) of the ERA and was therefore entitled to be paid for one week's holiday.
We have previously reported on the tribunal's decision in the case of Uber and CitySprint and this most recent decision follows those cases.
Our advice therefore remains the same - that businesses engaging self-employed contractors should bear in mind the need to be able to demonstrate that the day-to-day reality of the working relationship matches that described in the contract.