Worker or Contractor?: Substitution

Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514

The Court of Appeal (“CA”) upheld the Employment Appeal Tribunal (“EAT”) and the Employment Tribunal’s (“ET”) findings that the Claimant, a courier for the Respondent delivery company, was a worker and not an independent contractor.

The Claimant was a moped courier for the Respondent, which operated an app connecting couriers with delivery jobs. Couriers could undertake discrete deliveries or sign up for time slots, committing to be in a certain geographical area within that timeslot. Signing up to a time slot guaranteed the courier a minimum hourly rate, regardless of how many delivery jobs were available within that time. They could release this slot to other couriers on the app, but if no other driver volunteered to take the slot, the original courier would have to do the job or be penalised.

The Claimant complained that he had been unfairly dismissed and claimed for other entitlements such as notice and holiday pay. He claimed he was either an employee or, failing that, a worker within section 230(3)(b) of the Employment Rights Act 1996 (“ERA”). The ET held that the Claimant was a worker, because he was required to perform work personally and the Respondent was not a client of a business operated by the Claimant, but that he did not meet the higher threshold of employment. Whilst an unfettered right to send a substitute to perform the Claimant’s work would have been fatal to a finding of worker status, the ET found that the right to release a slot to other couriers did not amount to an unfettered right of substitution. The EAT upheld this finding.

The CA dismissed the Respondent’s further appeal, finding that the Claimant did not have an unfettered right of substitution. Releasing time slots back into the pool of couriers was the same as workers swapping shifts, and this contractual right to appoint a substitute was limited in that the substitute could only come from a pool of approved workers. In addition, a courier would not know who had picked up his time slot, and if no one did, he would be obliged to perform the work personally or face negative consequences.

The CA’s judgment sets out useful guidance on applying the principles expressed in the CA’s earlier decision in the case of Pimlico Plumbers. In that case the CA had given various examples of substitution clause and guidance on whether each was consistent with personal performance (and therefore employment / worker status) or not. The CA stressed that these examples should not be treated as exhaustive categories into which which the facts of subsequent cases must be forced. Rather, they expressed general principles and distillations of the previous case law. The overriding issue for an ET to decide is whether an individual is under an obligation personally to perform the work or provide the services. If they are under such an obligation, then this element of the test for worker / employment status is met.