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Worker Status and the Right of Substitution

As you will be aware the issue of worker status has been subject to significant litigation recently as the current position has been substantially defined through case law. The current law provides for three categories of individuals providing services in the job market. These are: employees, workers and self-employed contractors.

A worker is defined under section 230 of the Employment Rights Act 1996 as someone who has entered into or works under a contract of employment or any other contract whereby they undertake to do or perform personally any work or services. As such, a key requirement is whether the individual is obliged to personally carry out services. An unfettered right for an individual to appoint a substitute for any reason without sanction will be fatal to a claim that they are a worker.

The case of Stuart Delivery Ltd v Augustine considered the question of substitution and found that a delivery courier was a worker as his right to release a shift that he had previously agreed to work was not an unfettered right of substitution.

In this case, Mr Augustine worked as a courier for the Company. As part of his role, he could commit to working “slots” whereby he would agree to be online in certain places, for certain amounts of time, for a guaranteed minimum payment. Once a courier signed up for a slot they could send a “Release Notification” which then made it available to other couriers to accept on a first come first-served basis. The courier releasing the slot would not know the identity of the courier who had accepted the slot in his or her stead. Slots could only be released via the Staffomatic app.

If after sending a release notification no-one accepted the slot the courier who first signed up for the slot was liable for completing the slot. If they missed it they could face penalties such as being ineligible for delivery rewards, being suspended from accessing the app and their performance scores could be downgraded.

The Company argued that this process meant the couriers were not under an obligation to carry out services personally and therefore they could not be workers.

The Employment Appeal Tribunal (“EAT”) found that there was not a right for Mr Augustine to substitute at all and there was merely a right to hope that someone else in the pool would relieve him of his obligation. To illustrate this point the Tribunal confirmed that Mr Augustine could not get his mate to undertake the obligation even if they were well qualified. As such, the Company had an absolute and unfettered right to withhold consent since only the couriers it had accepted onto their pool could use the Staffomatic app to sign up for slots a fellow courier wished to relinquish. Mr Augustine, therefore, had no control whatsoever over who, if anyone, would accept a slot he had signed up for and no longer wished to work.

The EAT’s decision highlights that the tribunal will examine any substitution clause contained within a contract to analyse what actually occurs in practice and whether an individual has the right of substitution.

This bulletin is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as, legal advice.

JMW Solicitors is a Limited Liability Partnership.