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Employment status in the gig economy

Dewhurst v CitySprint UK

In a second high-profile decision on employment status in the gig economy, a tribunal has held that a CitySprint courier is a worker despite the contractual documents describing them as a self-employed contractor. The case is a further example of a tribunal finding that a gig economy worker can claim employment protections, following the ruling in favour of Uber workers back in October 2016.

Background

CitySprint provides a courier service and operates a fleet of between 50 and 60 couriers in London. The couriers typically work four days a week from 9:30 am to 6:30 pm, during which time the intervals between jobs range from 10 minutes to one hour.

CitySprint's couriers use a tracking device to manage their jobs and radios and mobiles to keep in contact with their assigned controller. They are expected to wear CitySprint's uniform, which they pay for via deductions from their wages.

Once recruited, couriers attend a CitySprint office to go through an electronic tick list on a computer to acknowledge the keys terms of their agreement with the Company, including:

  • That they are under no obligation to provide their services and CitySprint is under no obligation to provide work;
  • That they can send a substitute as long as the substitute can do the work;
  • That they are a "self-employed contractor" who is not entitled to benefits such as holiday, sick pay and maternity pay; and
  • That they operate as an independent business and pays his or her own costs.

Couriers are paid by the job, which CitySprint refers to as a self-billing and invoice system.

Facts

Ms Dewhurst (the Claimant) is a cycle courier with CitySprint (the Respondent) who brought a claim that she is a worker and therefore entitled to two days' pay for annual leave that she was not paid for.

CitySprint maintained that its couriers are self-employed and therefore not entitled to basic worker’s rights such as annual leave.

The Decision

The tribunal found that although the agreement between Ms Dewhurst and CitySprint stated she was self-employed, the reality of the relationship made it clear that she was integrated into the business. She did not have the direction as to how her services were performed, she was expected to work when she said she would, she was given directions, she was instructed to smile and wear a uniform, and she did not submit her own invoices for payment due as she was told when she would be paid and how much, according to CS Ltd's calculations.

The tribunal also highlighted that in practice the couriers cannot send a substitute. The idea of a substitute does not reflect CitySprint's publicity material, which points out that its couriers are "fully trained" and describes them as "our couriers".

The tribunal therefore concluded that Ms Dewhurst was not working for herself as a self-employed contractor, but on CitySprint’s behalf.

Implications for employers

This is another first-instance decision on employment status in the gig economy, following Aslam and others v Uber BV and others [2017] IRLR 4 ET. Neither decision is binding on other courts and tribunals.

As with Uber, the decision is based on the disparity between the purported relationship in the contract and the reality of the working arrangement.

Both cases show that courts and tribunals will look beyond what is written in the agreement terms and, instead, focus on the reality of the situation when deciding employment status.

Employers should therefore be aware that potential Claimants are likely to be granted “worker” status if, in reality, that is what the relationship between the parties suggests. In order to maintain that individuals remain as self-employed, employers should reflect in practise what is stated in the contract.

CONTACT EMMA

If you would like more information or advice relating to this article or a Employment law matter, please do not hesitate to contact Emma Gross on 01727 798049.

© SA LAW 2017

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.

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Employment