What’s in a Word?
Published: 27 January 2017
I have always been fascinated by the meaning of words, particularly their meaning in law. One of my great interests in this area are the words ‘Employee’, ’Worker’, ‘and Sub-Contractor’. I have acted in many cases for both sides on the meaning of these very words, including acting in a landmark case back in 2010 to the Court of Appeal on the meaning of ‘Sub-Contractor ’(Tilson -v- Alstrom).
These issues continue to trouble the Employment Tribunal, and recently they are at it again.
Take the word ‘Uber’. My original small Oxford mini dictionary from the 80s, does not even have the word in it. A recent word search shows the meaning of Uber ‘Denoting an outstanding or Supreme example of a particular kind of person or thing’- its origin is German.
However, in the world of employment law ‘Uber’ nowadays according to Google means “Uber Technologies Inc. an American worldwide online transportation network company headquartered in San Francisco, California” In October 2016 following an Employment Tribunal ruling in Farrar & Aslam -v- Uber taxis it was decided that Uber drivers can be classed as ‘Workers’ - and not self-employed ‘Sub-Contractors’. Two drivers claimed the company acted unlawfully by not paying them the National Minimum Wage, holiday or sick pay. Uber argued its drivers are self-employed. The drivers also argued that their actions were controlled by Uber, so in effect they were employed by the firm.
Uber stated that there are more than 30,000 drivers in London and 40,000 in the UK using its app to find customers. Many do so, it says, because it allows them to work flexibly.
More and more Companies since Tilson have taken on self-employed contractors and workers who engage with work through apps. This is what is now often described as the ‘gig’ economy, and is fast growing like all technological advances.
There are a number of other similar cases following up behind the Uber Employment case. The next to follow are Cycle Couriers another familiar sight on the streets of London and elsewhere in other Cities in the UK.
In January 2017 in Dewhurst -v- Citysprint UK Ltd, an Employment Tribunal held that a Cycle Courier for Citysprint was a ‘Worker’ under of the Employment Rights Act 1996, rather than being in business on her own account, the case is similar with the Tribunal ruling against Uber mentioned above with regard to the meaning of ‘Workers’, not being self-employed contractors.
The facts of this case are that Couriers who pass a two-day recruitment process are presented with a "Confirmation of Tender to Supply Courier Services", which purports to treat them 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 Citysprint refers to the payment process as a self-billing and invoice system, in practice couriers did not need to submit invoices for individual jobs; instead, Citysprint automatically calculates payments due and pays them weekly in arrears, after deductions.
Following the approach of the Supreme Court in Autoclenz v Belcher and others in 2011, the tribunal found that the terms of the "Confirmation of Tender" document did not reflect the true relationship between the parties. It was therefore necessary to look at the reality of the situation.
Ms Dewhurst, was required to log into the company’s Citytrakker tracking system when she was on circuit, 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 agreed that Ms Dewhurst had been recruited by Citysprint to work for it, and was integrated into the business.
Accordingly, Ms Dewhurst was a ‘Worker’ during periods when she was logged into the Citytrakker system.
What should Businesses do?
Firms are going to do more business in the ‘gig’ economy, that is not a bad thing, what is important is to avoid trying to appear to be an ‘Employer’ with ‘Employees’ and then act irresponsible in providing employment rights to the ‘Employee’ or ’ Worker ’ if in reality the situation is to have no Employee or Worker in working relationships the Contracts entered into between the parties must reflect what is actual happening on the ground.
Failure to review and address the reality of the situation will result in further challenges, particularly in connection with statutory rights and benefits like wages, holiday and sick pay entitlements, that can prove to be costly. If you want self-employed ‘Sub Contractors’, let them be just that. Both sides can enjoy the benefits of self -employment, providing there is no exploitation of one against the other, the consequences are potential additional liabilities for the Business. When in doubt, seek legal advice before entering into the gig economy.
By Cyril Dennemont,
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.