UK: Gig economy - further rulings finding worker status

We recently reported on the tribunal ruling that Uber drivers were 'workers' entitled to statutory rights such as holiday and minimum wage (see here). That ruling is being appealed, but in the meantime there have been further decisions along similar lines. Although the cases are fact-sensitive, the trend highlights the need for employers using workers on a self-employed basis to review their arrangements and consider whether their employment model can be tweaked to minimise the risk.

The test for worker status is whether an individual is required to perform work personally for a person who is not a client or customer of the business carried on by the individual. Key factors will be whether there is a right of substitution and to what extent it is fettered, and whether the individual can be viewed as integrated into the employer's business and subject to its control, rather than running their own business on their own terms.

In Dewhurst v CitySprint UK, the tribunal concluded that the contractual arrangements whereby the courier tendered to supply services did not reflect the reality; in particular the substitution clause was so prescriptive that only another Citysprint courier could fill in, and in reality couriers were substantially integrated into the Citysprint business: they were instructed to wear a logo and behave in a certain way with clients, were expected to work when they could and in practice could not work for others at the same time, were paid weekly in arrears at rates set by Citysprint without needing to submit invoices, and were given directions throughout their time 'on circuit'.

Most recently, in Pimlico Plumbers & Charlie Mullins v Gary Smith, the Court of Appeal has agreed that a plumber working for Pimlico Plumbers was a worker. The fact that plumbers were able to use assistants or specialist sub-contractors when carrying out a job was considered not to be inconsistent with an obligation of personal performance; it would only be inconsistent if the plumber had a contractual right to pass on an entire job to someone else. The degree of control exercised by Pimlico Plumbers was also inconsistent with it being a customer or client of a business run by the individual. Relevant factors included that the individual had to work a minimum numbers of hours, was required to wear uniform and rent the company's branded vans, and was subject to restrictive covenants preventing competitive work for 3 months post termination.

Employers may wish to consider whether the advantages of self-employed status are outweighed by the benefits of being able to control hours and substitution and impose branding requirements and restraints on competition. Employers should also look out for the report of the Matthew Taylor Independent Review of Employment Practices in the Modern Economy, expected in June 2017, given its particular focus on the gig economy.