Second Employment Status Case for gig economy

Further to the recent Uber case in October 2016 where drivers who had been considered self employed by the taxi hailing service Uber were found to be workers by an Employment Tribunal (albeit Uber intend to appeal), a second case has been heard on 5 January 2017 relating to the "gig" economy, being labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

The latest case of Dewhurst v CitySprint UK Ltd relates to a cycle courier who has been found by a Tribunal to be a worker, not self employed. It is one of four legal challenges being taken against courier companies, which include Addison Lee, Excel and E-Courier.

Ms Dewhurst had been with CitySprint for the past two years, during which time the company classed her as self-employed. However, she claimed her role was more like that of a worker as in her view "We spend all day being told what to do, when to do it and how to do it. We're under their control…"

The documentation in place which CitySprint sought to rely on to show self employed status was a "Confirmation of Tender to Supply Courier Services", which purports to treat the couriers as self-employed contractors. They are then asked to electronically acknowledge a number of key terms. These make clear that the courier is under no obligation to provide services and CitySprint is under no obligation to provide work; that the courier may use a substitute to provide the work, so long as the substitute fulfils certain criteria (although this did not happen in practice); that if the courier does not work they will not get paid; and that the courier is not entitled to holiday, maternity or sick pay. Once they are ready for work, couriers are paid by the job. Although City Sprint refers to the payment process as a self-billing and invoice system, in practice couriers do not need to submit invoices for individual jobs; instead, CitySprint automatically calculates payments due and pays them weekly in arrears, after deductions.

The Employment Tribunal judge described CitySprint's contractual arrangements as "contorted", "indecipherable" and "window-dressing" and this case reinforces the need to not place sole reliance on the written terms in place between the individual and the business and a need to look at what happens in practice to establish the true employment status of an individual.

In brief, Ms Dewhurst, was required to log into the company's Citytrakker tracking system when she was ready for work, and log out at the end of the day. She wore a uniform, was expected to work when she said she would, was directed by a controller (through radios and mobile phones), and was even told to smile as part of providing a professional service. Overall, CitySprint couriers have little autonomy to determine the manner in which their services are performed, and the tribunal found that Ms Dewhurst was integrated into the business. She was therefore entitled to the rights afforded to workers including holiday entitlement.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.