Workers or Independent Contractors?

Another case and another decision by the Courts that a group of individuals are workers and not independent contractors. The company in this case is Stuart Delivery Ltd. Like cases such as Pimlico Plumbers, restrictions on the right of substitution will likely lead to a finding that the work needs to be performed personally, and therefore that the individuals are workers.

In this case, Mr Augustine worked as a courier for Stuart Delivery. If he signed up to a particular time slot then he had to (i) remain in a certain area for 90% of that time slot, (ii) be available for the whole period, and (iii) not refuse more than one delivery job during the time slot. This was in order to receive a guaranteed minimum rate of £9 per hour. If Mr Augustine no longer wanted to work a particular time slot, then he could release it back to other couriers with access to Stuart Delivery’s app to take up. If, however, nobody took up the slot, Mr Augustine had to complete the slot or face penalties.

The Court of Appeal found that being able to release the time slot to an unknown courier and not being able to put forward his own substitute, was not “an unfettered right to substitution”. As such, they concluded that Mr Augustine was a worker and not an independent contractor.

The decision is consistent with other recent decisions on worker status, and specifically the right of substitution. There are further challenges to employment status which will be heard by the Courts in the near future, including a claim by estate agents working for Purple Bricks and delivery drivers at Amazon.

Head of Employment, Liam Kenealy offers the following advice: “Companies that rely on contractors, should look to take legal advice on this practise to see whether they are at risk of worker status being found in the event that the contractors challenge their status. Should they be found to be workers, the consequences can be high – individuals will have the right to paid holiday, pension auto-enrolment, be paid the National Minimum Wage, and have unfair dismissal rights, as well as the right to claim for the previous failure to pay these sums”.

Do you engage with sub-contractors? Are you confident that they wouldn’t have worker status? If you are unsure about the terms of your sub-contractor agreements please contact our Employment Law team on 01246 932100