The Gig Economy Update: CitySprint riders given ‘Worker’ status

Background

Following the Uber judgment (a summary of which can be found here), the case brought by Margaret Dewhurst against CitySprint UK Ltd (CitySprint) considered whether Ms Dewhurst was employed as a ‘worker’ rather than a “self-employed contractor” for the purposes of the Employment Rights Act 1996 (Act), as asserted by her contract with CitySprint (entitled ‘Confirmation of Tender to Supply Courier Services to CitySprint (UK) Ltd‘ (Contract)). As outlined in our summary of the Uber case, ‘workers’ are not entitled to the full array of rights which employees receive, however worker status does entitle individuals to certain rights, such as minimum wage and holiday pay which are not applicable to the genuinely self-employed.

Facts

CitySprint is one of Britain’s largest courier companies, with around 3,200 couriers in Britain. Ms Dewhurst made deliveries for CitySprint for around two years’, including the delivery of clinical notes, blood and prescriptions to London hospitals. She typically worked for four days per week, from 9.30am to 6.30pm. Ms Dewhurst’s claim, which was supported by the Independent Workers’ Union of Great Britain (IWGB), was brought in relation to two days’ of outstanding holiday pay, however the key issue considered by the London Central Employment Tribunal (Tribunal) was Ms Dewhurst’s legal status.

Decision

Ms Dewhurst was successful in her case before the Tribunal, where Employment judge Joanna Wade considered CitySprint’s control as a determining factor in the outcome. It was held that, whilst Ms Dewhurst was logged onto CitySprint’s tracking system, she would be deemed a ‘worker’ under S.230(3)(b) of the Act.

Similar to the stance taken in the Uber decision, Tribunal judge Wade wrote that:

“It is CitySprint which has the power to regulate the amount of work available, and it keeps its couriers busy by limiting the size of the fleet.”

Some of the factors pointing towards Ms Dewhurst’s ‘worker’ status included:

• Recruitment: As part of the recruitment process, “applicants” are not provided with a hard copy of the Contract (which is also not physically signed), but are required to submit to an electronic check-box list of key terms to which they agree, which attempt to highlight the self-employed contractual nature of the agreement between the “applicant” and CitySprint. However, Employment judge Wade deemed this as “an effective barrier to employment“, stating that it “illustrates the inequality of bargaining power“.

• Discretion as to how the services were to be performed: Ms Dewhurst’s contract seemingly gave Ms Dewhurst the ability to: “determine the manner in which the services are performed at all times, including but not limited to the route“. However, Ms Dewhurst was given an induction course, which included a set of slides referring to: “Ways to properly greet a customer: Smile with your greeting“; and “What to do if no one is home: Only if instructed by your controller can you …“. Thus, whilst she had discretions regarding the route used, this did not extend to how the services were undertaken.

• Working Patterns: Furthermore, despite what the contract portrayed, it was found that, in practice, couriers were unable to accept work for other jobs whilst undertaking jobs for CitySprint. Nor could they choose or select which jobs they wished to perform whilst ‘on circuit’ for CitySprint.

• Invoicing: Whilst on induction, couriers are told that CitySprint offers a “self-billing service”, this does not reflect the reality that this is provided, rather than offered. Employment judge Wade emphasised this as follows: “individual couriers do not touch the invoice from beginning to end and they wait to be paid…“

• Substitution: Employment judge Wade also criticised Ms Dewhurst’s supposed ability to provide a substitute to perform jobs on her behalf, finding that this was not possible in practice and that the clause was “contorted and self-destructive“, she explained:

“…the contract is very specific about how the services are to be provided by the approved and trained couriers and permission must be obtained for arrangements to change. It would be a breach of contract for CitySprint to allow Ms Dewhurst to substitute.”

Employment judge Wade wrote: “any concept of her operating a business is a sham“. She summarised that, despite what her Contract said, Ms Dewhurst was:

• expected to work when she said she would;

• directed during times whilst she was ‘on circuit’;

• trained to “smile with your greeting” and wear the CitySprint uniform;

• instructed what to do if she was unable to deliver a package;

• informed that she would be, and was in fact, paid in accordance with CitySprint’s calculations (including deductions); and

• advised that she was part of CitySprint’s “family” on numerous occasions.

Comment

In response to the outcome, a spokesperson for CitySprint stated:

“This case has demonstrated that there is still widespread confusion regarding this area of law, which is why we are calling on the government to provide better support and help for businesses across the UK who could be similarly affected.”

This case is typically fact-specific and is not a binding precedent, being only a first-instance decision. This area of law is likely to continue to be of key interest, with similar challenges against three further courier companies (Addison Lee, Excel and E-Courier) due to be heard in March/April 2017.

The Government appears to have acknowledged the need for clarification in relation to such issues. On 26 October 2016 the Business, Energy and Industrial Strategy Committee launched an inquiry into the ‘Future world of work and rights of workers’ which will consider, amongst other things, the status of those working in the ‘gig economy’. Submissions were requested to be made by 19 December 2016, with evidence sessions due to commence in early 2017.

The ‘Independent Review of Employment Practices in the Modern Economy’ led by Matthew Taylor (Chief Executive of the Royal Society of the Arts) also commenced on 30 November 2016. This is to consider the need for employment practices to evolve in order to meet the requirements of modern business models, including those using digital platforms like Uber and Deliveroo. The outcome of this review is expected in mid-2017.

Memery Crystal LLP is hosting a Breakfast Seminar on 26 January 2017, in which we will take a more detailed look at current cases focused on the gig economy and issues of status and how these will influence the development of employment law in 2017. For more information and to register for the event, please click here.

For any further information, please contact a member of our Employment team.