Out-Law / Your Daily Need-To-Know

Tribunal seeks CJEU clarification over courier employment status

Out-Law News | 25 Sep 2019 | 1:20 pm | 2 min. read

The Court of Justice of the European Union (CJEU) has been asked for clarification over whether a contractual right to substitute means that an individual cannot be classed as a "worker" in a claim under the Working Time Regulations.

Judge Andrew Clarke at the Watford employment tribunal has referred a number of questions to the CJEU in the context of an employment status claim brought by a Yodel parcel courier, according to a reference published by employment barrister Daniel Barnett.

Employment law expert Claire Scott of Pinsent Masons, the law firm behind Out-Law, said that the case "highlights that the issue of employment status is far from settled".

"Employment status is still high on the agenda of businesses, particularly given that they are now grappling with the extension of the IR35 rules making many of them liable for determining the tax status of contractors they engage through personal service companies from April 2020," she said.

"Any findings by the CJEU will be of interest regardless of whether the UK remains bound to follow its decisions for any period of time as part of a future Brexit deal. The judges' interpretation is likely to remain persuasive, given that the UK's Working Time Regulations are derived from EU law," she said.

'Worker' is an intermediate legal status between employees and the genuinely self-employed. It does not carry the same redundancy or unfair dismissal rights as employee status, but workers do have the right to the national minimum wage under the National Minimum Wage Act and paid holiday leave under the Working Time Regulations.

The courier in this case is engaged by Yodel under a 'courier services agreement', which expressly states that he is a self-employed independent contractor rather than an employee or worker. He uses his own vehicle, which does not carry Yodel branding, and does not wear a uniform. He is, however, supplied with a hand-held device through which Yodel assigns work and monitors service performance.

The courier services agreement expressly permits the courier to engage a subcontractor or 'substitute' to perform all or any part of the services he has contracted to provide to Yodel, provided the substitute meets certain standards. It also allows the courier to perform similar services for any other company or individual that he chooses to. Work is provided to the courier on a 'when needed' basis, and he is under no obligation to accept any work offered.

To qualify for worker status under UK law, an individual must "undertake to do or perform personally any work or services" for the engaging business. A genuine, unfettered right of substitution is therefore inconsistent with worker status. Last year the Central Arbitration Committee, which deals with collective disputes and union recognition cases, dismissed a claim for union recognition on behalf of a number of Deliveroo couriers after finding a right to substitution in their contracts "fatal" to their claim for worker status.

The employment judge, in his reference to the CJEU, said that there was a "potential inconsistency" between the UK position and the way in which the EU court has interpreted the term 'worker'. For example, the CJEU has defined a 'worker' as "a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration".

The facts of the case "also give rise to problems associated with the computation of working time which the CJEU has not yet been called upon to address and which cannot be answered by inferences from existing case law", the tribunal judge said in his reference.