This case has been rumbling through the courts for a number of years. In August 2011, Mr Smith attempted to bring claims for unfair dismissal, unlawful deduction of wages, disability discrimination and holiday pay in the employment tribunal. In the original tribunal decision, which was handed down in April 2012, it was decided that Mr Smith was not an employee, but he was found to be a worker. Pimlico appealed. In November 2014, the Employment Appeal Tribunal agreed with the tribunal’s decision.

Pimlico made a further appeal to the Court of Appeal. Our report on the court’s dismissal of that appeal can be found here. Pimlico appealed to the Supreme Court.

In considering the appeal, the Supreme Court focussed on two questions when deciding whether or not Mr Smith was a worker:

The court noted that Mr Smith’s contracts with Pimlico gave him a limited right to employ a substitute. He could engage another person to provide assistance if he lacked the specialist skill required for a particular job. The Supreme Court found that assistance in performance was not the same as substitution of performance.

Mr Smith was also permitted to arrange for a job to be carried out by another Pimlico operative if he wished to work on a more lucrative gig himself. However, there was no contractual right underpinning this arrangement. It was merely a concession made by Pimlico.

Taking both of these findings into account, the Supreme Court concluded that the right to use a substitute was of insignificance to Pimlico. In addition, the fact that Mr Smith could only use another Pimlico operative to do jobs on his behalf who would also have been subject to the same heavy obligations as him indicated that the right of substitution was not truly unfettered.

The Supreme Court concluded:

“The tribunal was clearly entitled to hold, albeit in different words, that the dominant feature of Mr Smith’s contracts with Pimlico was an obligation of personal performance. ” Supreme Court

The second issue for the Supreme Court to decide was whether Pimlico was in reality Mr Smith’s client or customer, which would be the situation if Mr Smith was a self-employed contractor providing services to Pimlico. This turned on whether Pimlico was obliged to give Mr Smith work that he was in turn obliged to carry out.

The Supreme Court noted that the contractual arrangement [...]]]> http://lawandlabour.com/pimlico-plumbers-loses-supreme-court-appeal-about-plumbers-status-as-worker/feed/ 0 http://lawandlabour.com/deliveroo-riders-are-not-workers/ http://lawandlabour.com/deliveroo-riders-are-not-workers/#comments Sun, 19 Nov 2017 16:54:08 +0000 http://lawandlabour.com/?p=2548 Deliveroo is a food-delivery service that utilises motorbike and bicycle riders to deliver takeaway food from restaurants to customers. In London, its riders are assigned to specific geographic zones.

In November 2016, the trade union the Independent Workers’ Union of Great Britain (IWGB) applied to the Central Arbitration Committee (CAC) for recognition for collective bargaining in connection with Deliveroo riders working in the Camden and Kentish Town (CKT) area. Deliveroo opposed the application by arguing that its riders were not ‘workers’ as defined within trade union legislation.

The test for recognition required the CAC to determine whether 10% of workers in the proposed bargaining unit were in favour of union recognition. The starting point for the CAC was whether any rider in the CKT area could be said to be a ‘worker’ as defined by section 296 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A).

According to section 296 TULR(C)A, a ‘worker’ is a person who works under either:

Part (b) of the definition was the only part of the legislation that could possibly be applied to the relationship between Deliveroo and its riders. The CAC therefore had to consider whether each rider was obliged to work personally for Deliveroo or whether the rider could provide a substitute to carry out work in his stead.

The CAC noted that Deliveroo’s contract with its riders contained a substitution clause permitting the rider to provide a substitute rider if he did not wish to carry out the delivery himself. Such clauses are common in gig economy contracts, but the right is usually not exercised, leading to a suspicion that the clause is merely a sham to give the illusion of self-employment.

However, in Deliveroo’s case there was evidence that the substitution clause was not merely for show, as the company had proof that one rider had asked a friend to make a delivery on his behalf for which he had pocketed a share of the delivery fee. This evidence was sufficient for the CAC to decide that the right of substitution was “unfettered and genuine”.

The CAC maintained this position despite what it referred to as the ‘substitution conundrum’. To the CAC it appeared to make little business sense that Deliveroo would spend time and energy on hiring, vetting and training its riders only to permit an unknown person who had not been subjected to such vigorous preparation to carry out deliveries for the business. Faced with this anomaly, the CAC noted that its role was not to assess whether a particular business model made good sense or not. It was solely concerned with whether the substitution right was genuine and the CAC believed that it was.

“By allowing an almost unfettered right of substitution, Deliveroo loses visibility, and therefore assurance over who is delivering services in its name, thereby creating a reputational risk, and potentially a regulatory risk, but that is a matter for them. The Riders are not workers within the statutory definition of either [...]]]> http://lawandlabour.com/deliveroo-riders-are-not-workers/feed/ 0 http://lawandlabour.com/uber-loses-worker-status-appeal/ http://lawandlabour.com/uber-loses-worker-status-appeal/#comments Mon, 13 Nov 2017 13:02:03 +0000 http://lawandlabour.com/?p=2535 Uber’s appeal against the decision of the Employment Tribunal that its drivers are workers has been unsuccessful as the Employment Appeal Tribunal (EAT) dismissed Uber’s appeal in its entirety.

For the background to the appeal, read our article on the Employment Tribunal judgment from October 2016.

The EAT appeal focused on the true relationship between the drivers and Uber London Limited. Uber had sought to argue that its relationship with the drivers was one of agency, but the EAT decided that the Employment Tribunal had been entitled to reject this characterisation as being incorrect. The EAT felt that it could not be said that Uber drivers were principals in an agency relationship because the arrangements were inconsistent with the drivers being in business on their own account. The fact that the drivers were controlled by Uber London was an indication that the drivers were not true business owners.

The EAT concluded that the Tribunal had not erred in either its approach or its conclusions. Uber had therefore failed to meet the high threshold required to show that the Tribunal’s decision had been perverse.

A second limb of the appeal was the question of when drivers could be considered to be at work. The EAT agreed with the Tribunal’s finding that the drivers’ obligation starts when:

However, the EAT noted that the question of a driver’s status between trips was a tricky one to answer, particularly if the driver worked for more than one operator at the same time. The amount of time a particular driver actually spent driving, and therefore working, would hinge on “fact and degree”.

It is almost a foregone conclusion that the decision will be appealed to a higher court, in keeping with the path trodden by other gig economy cases, such as that concerning Pimlico Plumbers.

CASE Uber BV and ors v Aslam, Farrar and ors, Employment Appeal Tribunal, 10 November 2017

The Court of Appeal looked at characteristics of the relationship between PP and Mr Smith to determine whether he had worked as an independent contractor. The issue of personal service – whether a person is required to carry out work personally or whether they can delegate tasks to another person – was a key issue at the appeal as a requirement for personal service tends to indicate an employment relationship. The Court of Appeal found that Mr Smith was personally required to carry out the plumbing work himself and neither his agreement with PP nor their manual permitted him to get a substitute to perform tasks on his behalf. The Court of Appeal also found that PP exercised a degree of control over Mr Smith that was inconsistent with them being a customer or client of a business run by him.

“The essential point was…that the evidence showed that Mr Smith was obliged to work (or be available for work), subject to the various elements of flexibility that [the Employment Tribunal judge] identified, essentially on a full-time basis and that he could not be properly said to be working on a casual basis.” The Court of Appeal

The Court of Appeal considered Mr Smith’s hours of work and found that he was obliged to work 40 hours a week, even if PP did not enforce that rule. In practice, the rental charges incurred by Mr Smith in using PP’s van and mobile phone meant that he had to work for at least 40 hours a week in order to earn sufficient money to provide him with a decent income.

The appeal was therefore dismissed.

The case is another in the chain of decisions regarding the employment status of those working in the “gig economy”, such as the recent Uber case. It shows that the courts remain keen to look beyond the smokescreen of the contractual arrangement between businesses and those who work for them in order to determine the true nature of the working relationship in practice.

CASE Pimlico Plumbers Ltd and ors v Gary Smith, Court of Appeal, 10 February 2017

On 13 June 2018, the Supreme Court upheld the finding that plumbers working for Pimlico Plumbers are workers rather than independent contractors. For details of the judgment, read our report here.

Photograph: “Infrastructural (18/365)” by Flikr user Rex Babiera used under Creative Commons Attribution 2.0 license 

The Tribunal found that Uber drivers were workers whenever three elements of their working arrangement were satisfied:

The Tribunal was critical of the lengths it felt Uber had gone to in order to disguise the true nature of its working arrangements with drivers, “resorting in its documentation to fictions, twisted language and even brand new terminology”. The Tribunal saw through this smokescreen to find the true relationship between Uber and its drivers was that of worker and employer.

Uber imposes numerous conditions on drivers…instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties. Employment Tribunal

The Tribunal provided several examples that ran counter to Uber’s view that the drivers acted as self-employed businessmen and which supported the drivers’ claims that they were workers operating under its control.  These included:

Once the Tribunal had decided that the drivers were workers, there was the second question of when drivers could be considered to be at work.  This was relevant to the questions of whether drivers were being paid according to NMW legislation and for calculating the holiday pay drivers would be due.

The Tribunal found that whenever the three employment status conditions were satisfied, the Uber driver could be considered to be at work for holiday pay purposes.   In considering the NMW, the Tribunal decided that Uber drivers did not carry out “time work”, but instead carried out “unmeasured work” so that the “relevant hours” when calculating the NMW would be any hours worked by the driver.

The drivers’ claims were brought against Uber B.V., whose headquarters are in Amsterdam, and its local subsidiaries Uber London Ltd and Uber Britannia. Despite Uber B.V. purporting to be the entity that had entered into contracts with the drivers, the Tribunal found that in reality the drivers were employed by Uber London as it was the main point of contact between Uber and its drivers.

This preliminary ruling is likely to be the first stage in what will inevitably turn into a long-running saga. The Tribunal’s judgment carries onerous financial implications that spell disaster for Uber’s business model and the wider gig economy. It is therefore expected that Uber will appeal the Tribunal’s judgment to a higher court.

CASE Aslam and ors v Uber B.V. and ors, 28 October 2016

On 10 November 2017, the [...]]]> http://lawandlabour.com/uber-drivers-are-workers/feed/ 0