Worker status: Courier with a limited right of substitution was a worker

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Worker status: Courier with a limited right of substitution was a worker

Published 11 November 2021

The Court of Appeal has held that a courier’s right to notify other couriers that his delivery slot was available was not an unfettered right of substitution, that he was therefore required to perform services personally and met the definition of a “worker”.

THE FACTS

Mr Augustine was a moped courier who worked for Stuart Delivery Ltd. He claimed in the employment tribunal that he had been unfairly dismissed and that he was owed notice pay, arrears of pay, holiday pay and other payments. In order to bring these claims, he would have to be an employee or a worker. 

A “worker” is someone who works under a contract where they undertake to do or perform personally any work or services for another person who is a party to the contract, and whose status is not, by virtue of the contract, a client or customer of any profession or business undertaking carried on by the individual. According to existing case law, if the individual has an unfettered right to find a substitute to perform the work, they will not be considered to “perform personally” the work or services, and will not be a worker. If they have a right to substitute which is qualified only by the requirement to ensure that the substitute is suitably qualified to perform the work, they will not generally be considered to be a worker.  If the right to substitute is conditional on the consent of another person who has the discretion to withhold consent, they will be a worker.

The arrangements for Mr Augustine’s work included:

  • He could opt to undertake individual jobs or sign up for one or more time slots via an app on his smartphone.
  • This required him to be available for a slot in a certain area at a certain time in return for a minimum rate of £9 per hour.
  • If Mr Augustine signed up for a slot he could request to release it via the app, making it available to other couriers.
  • However, if no one accepted the slot, he would either have to be available for the slot or suffer penalties, including losing performance rewards, his £9 per hour, and potentially receiving a poor performance score and the removal of the right to register for future slots.
  • This was described as a “carrot and stick” system of rewards and punishments, designed to ensure an optimally reliable supply of couriers to meet the demands of users. Stuart Delivery’s business model depended on meeting the demands of its users. If Mr Augustine’s opted to take a slot and was then not available for it, there was a real risk of negative sanctions.

The employment tribunal held that Mr Augustine was not an employee (and so could not claim unfair dismissal), but that he was a worker. Stuart Delivery appealed unsuccessfully to the EAT and then to the Supreme Court on the decision that he was a worker. The Supreme Court dismissed the appeal.

Key to the finding that Mr Augustine was a worker was the question of the right of substitution. In reaching their decisions, the following were key considerations for the tribunal, EAT and Supreme Court:

  • Mr Augustine could only release the slot to one of the couriers in Stuart Delivery’s pool of couriers. He could not choose to whom the slot would be released, nor would he know which courier would take up the slot.
  • He could incur significant penalties if another courier did not take up the slot and he did not then work it himself.
  • This limited right was characterised as “a right to hope that someone else in the pool will release you from your obligation” – this was not a sufficient right of substitution to remove Mr Augustine from the obligation to perform his work personally.

WHAT DOES THIS MEAN FOR EMPLOYERS?

This is an important case on when, if ever, courts will consider a qualified right to substitute to be sufficient to show that an individual is not required to perform services personally.  An individual who has a genuinely unfettered right to substitute will not be a worker. However, it will be rare for a qualified right to substitute to be sufficient to show that the individual is not required to perform services personally.  

Stuart Delivery Ltd v Warren Augustine [2021] EWCA Civ 1514

Authors

Hilary Larter

Hilary Larter

Leeds

+44 (0)113 251 4710

Zoë Wigan

Zoë Wigan

London - Walbrook

+44 (0)20 7894 6564

Joanne Bell

Joanne Bell

Manchester

+44 (0) 161 934 3179

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