In two recent cases concerning employment status, the Employment Appeal Tribunal (EAT) upheld decisions that drivers who provided delivery services were neither employees nor workers. These judgments in favour of the alleged employers go against the general trend we have seen in recent years of recognising many of those engaged in the gig economy as “workers”. The most notable example of this trend is the UK Supreme Court’s landmark decision in 2021, which held that drivers working via a ride-sharing platform were not independent contractors but, instead, were workers and therefore entitled to certain employment rights, such as the minimum wage and holiday pay.
Stojsavljevic and another v. DPD Group UK Ltd
The claimants in this case provided parcel collection and delivery services for the respondent. Delivery drivers entered into franchise agreements with the respondent to provide their services. The claimants argued that they contracted as individual drivers, whilst the respondent contended they were independent contractors.
The claim focused on personal performance. The key question for the tribunal was whether the claimants’ right to provide a substitute driver under their agreements was effectively fettered by stringent requirements imposed by the respondent in a non-contractual operating manual. These requirements included that the drivers must be aware of the respondent’s practices, be legally entitled to drive in the UK and be engaged for a minimum of 90 days.
At first instance, the employment tribunal (ET) found that these were minimum requirements and genuine terms for business needs, which did not act as a fetter to the claimants’ right to provide a substitute. The EAT upheld this decision and reasoning. The respondent was entitled to satisfy itself that proposed drivers were appropriately qualified, and it had no broader right to refuse any substitute. The claimants therefore had a genuine right of substitution which was inconsistent with any obligation of personal service and so with employee or worker status. The EAT held that the ET was correct to conclude that the claimants were independent contractors.
Johnson v. Transopco Ltd
In this case, the claimant was a London black-cab driver on his own account. In 2017, he registered as a driver on the respondent’s “Mytaxi” app. He used the app to source passengers between April 2017 and April 2018, during which time he also continued to drive as a self-employed taxi driver. The claimant earned a total of £4,560.48 from rides sourced via the Mytaxi app. He made £30,472.45 over the same period as a self-employed driver.
The claimant brought various tribunal claims against the respondent. In order to succeed with these claims, he needed to be at least a “worker” as defined in s.230(3) Employment Rights Act 1996. The ET found that the claimant was in business on his account, and the respondent was his “client or customer” rather than his employer. This was largely because the respondent did not have the requisite control over the claimant’s work to create an employment relationship: the claimant could decide when he wanted to provide services and the respondent did not dictate the way in which he performed those services. The ET also drew attention to the fact that only a small portion of the claimant’s work was carried out through the Mytaxi app.
The EAT upheld this decision. It found that the ET was entitled to consider how the claimant’s time and income was divided between his work via the Mytaxi app and the work he completed separately on his own account. It also held that the ET was entitled to conclude that the relationship between the claimant and respondent was that of an independent business and a customer respectively.
Identifying whether an individual engaged to provide services is an employee or worker is important because this status determines whether they attract basic employment rights, such as holiday and sick pay, and if they can bring certain tribunal claims. Against the trend in recent years of courts recognising many of those engaged in the gig economy as “workers”, these two judgments appear to offer some hope to businesses who engage staff on a casual basis and do not want these arrangements to attract worker or employee status.
However, it is important to remember that employment and worker status cases all turn on their specific facts. Whilst these cases do provide helpful indications of the factors tribunals might consider in assessing employment status, it does not follow that these specific factors will always be determinative in every case. In each case, the tribunal will look at what the claimant in question does, how they carry out their work and the reality of who controls the relevant work to determine the true status of that individual.