Employment Law Updated: Identifying the correct Employment Status
Over the last year the employment law spotlight has often focused on what is known as the ‘gig economy’ with several cases finding individuals to be inappropriately identified as having self-employed employment status, where the reality is that they have worker or employed status. Several cases still await hearing with the likelihood of the same outcome. When a person is contracted to carry out work for an organisation which is to be delivered under some degree of direction, that individual is not working of their own accord and is therefore not self-employed. Despite not having a contract of employment, their employment status is that of a worker or employed, carrying employment rights such as being paid the National Living or Minimum Wage and a right to paid holidays.
The case of Aslam v Uber in 2018 was a much publicised case when the Employment Tribunal deemed Uber taxi drivers to be workers, as opposed to being genuinely self-employed individuals running their own business on the basis that they were required by Uber to personally undertake the work provided and could not provide a substitute to carry out the work. The case continues, following the judgement being upheld at EAT and Court of Appeal and is now destined for appeal at the Supreme Court.
Dewhurst v CitySpring UK (2017) is a further case of an individual working under direction. Dewhurst, a cycle courier was paid at a fixed rate, had to meet specific standards and wear the company logo. CitySpring UK prevented her from working for others and she could only turn work down if she found a substitute who was an existing CitySprint employees.
At a higher level, the Supreme Court have set binding precedents in this area, for example in Pimlico Plumbers v Smith (2018) , Smith was again deemed as not being self-employed due to the extent of control over him by the organisation. In addition, there was a requirement that he wear company uniform and rent their vans, and a restrictive covenant was in place to prevent him working for competitors or competing with Pimlico. In defence, Pimlico said he was able to hire his own assistants, was taxed as self-employed and charged a ‘mark-up’ for purchasing his own materials to do the job. Irrespective of these factors, the Court said he was not self-employed as he had to personally undertake the services required. He was instead identified as a worker.
The significance of the Sash Window Workshop v King (2017) case is in the financial impact on those company’s treating individuals as self-employed when they are workers. King’s employment status was found to be that of worker, and the EJC ruled he was owed £27,000 in holiday pay from the previous 13 years, during which time he had been treated as self-employed and paid commission only, an arrangement that King preferred over employed status. On dismissal, King then argued, with success, that he was in fact a worker with employment rights.
Deliveroo v IWGB Union (2018) is to date the only example of an opposite ruling however, when the Central Arbitration Committee (CAC) delivered a verdict that the Deliveroo riders’ union should not be awarded a compulsory recognition order, as the riders were in fact self-employed, rather than having worker status. Here the riders’ contracts enabled them to swap deliveries, in other words, they did not always have to provide their services personally, seen by the CAC as a ‘genuine right of substitution’. Interestingly, Deliveroo had amended contracts to include a substitution clause to maintain self-employed status for the riders, but this does not seem to have had an impact on the decision made by the CAC. The IWGB union sought judicial review but were unsuccessful in their attempts to overturn the ruling in the High Court .
cHRysos HR provides a flexible HR support and consultancy service which can help in cases of clarifying employment status. …………………………………..
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