The Court of Appeal has upheld the Employment Tribunal (ET) decision that an individual engaged by a courier delivery company as a moped courier, who had a limited right of substitution, had worker status.
The claimant worked as a courier for the respondent, a technology platform which connected couriers with clients via a mobile app. Couriers either signed up for individual jobs or for time slots via the app. If a courier signed up for a time slot, they had to make themselves available in a particular area for the allotted amount of time. If a courier was no longer able to work their selected slot, they could request to release it on the app, which would make it available to other couriers. However, the courier would only be released from their obligation to work their slot, if another courier picked it up. If no other couriers signed up for the slot, the original courier would either have to complete the job or pay a penalty.
The claimant worked for the respondent from November 2016 until March 2017, when he was dismissed. He brought a complaint to the ET for unfair dismissal and claimed that he had either employee or worker status and was owed notice pay, arrears of pay and other payments.
The ET decision
In response to the claim, the respondent argued that the claimant could not be a worker, because there was no contractual obligation to work or perform any services, even after he had signed up to a job. Additionally, referring to the guidance set out in Pimlico Plumbers Ltd and another v. Smith,the respondent contended that, since the claimant had a right to substitute another courier to do the job in his place, he was not contractually obliged to perform the work.
The ET found that the rewards and penalties attached to picking up a job acted as an incentive to ensure an optimally reliable supply of couriers. In dealing with the respondent’s second submission, the ET considered the issue of substitution. The ET found that the right to substitute was not a broad and absolute right from which the claimant benefited; it was dependent on another courier with a similar mode of transport accepting the slot. In addition, the claimant could not choose to whom he substituted the slot and, if the slot was not picked up by another courier, the claimant would pay a penalty. This arrangement could therefore not be described as the courier having an unfettered right of substitution and the ET found that the claimant was a worker. The ET dismissed the claim that he was an employee.
Appeal to the Employment Appeal Tribunal (EAT)
The respondent appealed against the decision to the EAT, based on the following grounds:
- the fact that the right to substitute was conditional on another person being willing to accept the slot was irrelevant to the existence and right of substitution and the issue of whether the claimant had an obligation to perform the work personally; and
- when determining whether the claimant’s right of substitution was limited by the need for consent, the relevant consent was that of the respondent and not the potential substitute.
The EAT accepted the respondent’s second submission to the extent that it agreed that the required consent (under Pimlico Plumbers) was that of the respondent. However, this did not help the respondent, given that the ET had found that the respondent had an absolute right to withhold consent, since the slot could only be made available to other couriers whom the respondent had accepted into their pool. The claimant had no control over to whom the slot could be assigned, which meant that no right of substitution existed, merely a right to hope that someone else would accept the slot.
The Court of Appeal (CA)
The respondent appealed against the EAT’s decision to the CA on the following grounds:
- the ET had misconstrued or misunderstood the guidance given in Pimlico Plumbers, in relation to the effect of a right of substitution, where the consent of another is required; and
- the EAT had erred in law, by upholding the ET’s decision that the respondent had an absolute and unqualified right to withhold consent to the substitution.
The primary consideration for the CA was whether the ET was entitled to find that the claimant undertook to perform personally any work or services under his contract with the respondent.
The CA dismissed the respondent’s appeal. It held that the system set up by the respondent was intended to ensure the claimant (and other couriers approved by the respondent) carried out the work and, in particular, personally carried out the delivery work for the slots for which he signed up. The ability of the claimant to substitute was conditional upon notifying and releasing the slot to other couriers on the app. In reality, this was not a sufficient right of substitution such as to release the claimant from his personal obligations to carry out the work. If another courier did not pick up the slot, the claimant would either have to work it or pay a penalty. Even if the slot was accepted by another courier, the claimant had no discretion as to its allocation.
In relation to the respondent’s first point, the CA noted that, while the guidance set out in Pimlico Plumbers remains the leading authority, the examples set out in that case do not form a rigid classification of when a right to substitute will mean there is no longer an obligation to perform work personally. The CA used this as a reminder that all cases will be decided on their specific facts and that courts will not “shoehorn” the facts of a case into one of the examples given in Pimlico Plumbers,since these are non-exhaustive examples rather than defined categories.
This case serves as a reminder to employers that, even if a substitution provision exists and this provision is conditional, the working relationship may still be considered to require personal performance and will attract worker status under the EA 1996.