A case from the Employment Tribunal – the sprinter, the cyclists, and the rolling up

Although this might sound more like an active day outdoors in the British Summer than an Employment Tribunal case, the case of O'Eachtiarna and others v Citysprint ("CUK") in fact concerns employment status within the gig economy. Ever since the earliest tribunal cases on this topic made headlines, companies have been uber-cautious (in more ways than one) about getting this right, often going to great (and creative) lengths, to present the relationship as one of a self-employed individual providing services to the business, in order to minimise worker status related claims.

In this case, worker status was being argued by the five claimants and holiday pay was at stake. Although the case was heard at the Employment Tribunal ("Tribunal") level, both sides were well represented by QCs, no doubt a reflection of the importance of this issue for both parties. The claimants (CL) in this case were engaged by CUK as cycle couriers. They argued that they were entitled to holiday pay as they were workers within the "limb B" definition in the Employment Rights Act 1998, by being (i) engaged under a contract requiring them to perform work personally for CUK, and (ii) as CUK was not their client. CUK's case was that CL were not workers, and even if they were, they had already received their holiday pay 'rolled up'.

The Tribunal's Approach

The Tribunal considered both the wording of the contract and witness evidence concerning practice on the ground, in examining the relevant aspects of the 'limb B' definition, namely (a) whether there was a contract; (b) whether personal performance was a dominant feature of the contract; and (c) whether CUK was a customer or client of CL's profession or undertaking. It also took note of guidance from the Supreme Court (Pimlico Plumbers), noting that it was helpful to look at matters such as rights of substitution, integration, control, freedom to reject work, and freedom to market one's services to the world when considering the question of personal performance.

The contract and arrangements on the ground

There was a contract (Contract) in place between CL and CUK, dated around November 2017 (despite CUK referring to this document as a "tender"). Prior to this date, CL were engaged under an old tender, but as CUK had already conceded that CL were workers in the period prior to November 2017, this Tribunal did not need to make a finding for the prior period.

The Contract contained a number of statements confirming that couriers were engaged on a self- employed basis, with no obligation to provide their services, with CUK having no obligation to provide them with work, permitting a suitably qualified substitute, and clarifying that there was no entitlement to holiday pay, sick pay or maternity pay.

The Contract was written in plain English and confirmed that there was no obligation to accept any job or minimum number of jobs; and that CUK would not deny them work or take action if they rejected a job. Although this was disputed by CL, CL could not provide any evidence to support the allegation that they would be penalised if a job was rejected. The Tribunal thus found that the contract reflected the arrangement in practice.

The Contract also permitted the couriers to work for third parties. The Tribunal found that although some CL provided other non-courier services such as bike repairs and pub work, they did not work for any other courier company. It also found that in practice, if CUK was able to offer CL sufficient work, it would make no sense for CL to work for another courier company given the practicalities, although it was possible for them to work for non-courier companies. The Tribunal found that the Contract reflected the arrangement in practice.

The Contract specified no fixed or minimum hours or days, and there were also no core hours. Although initially contested by CL, the Tribunal found that again, the Contract reflected actual practice, and that for some time, the couriers each had decided their own working patterns, choosing the hours and days around their own convenience.

Under the Contract, couriers were permitted to share their bike, Citytrakker and "jobs" with a substitute provided that around 12 conditions were met, relating to ability, right to work, liability, and pre-registration with CUK. This was complicated by a Substitute Form prepared by management which introduced a 5% bonus to couriers who used substitutes. The Tribunal found that in practice, none of the couriers used a substitute, citing the comments of one claimant who noted that it was unrealistic to use a substitute, as it would make more sense for the substitute to sign up as a courier themselves. The right was theoretical and did not reflect expectations in practice.

In relation to control, although the Contract purported to allow couriers to decide the order in which deliveries were made, this was contradicted by a Citytrakker manual of instructions. Despite CUK's claims that the manual contained suggestions, the ET found that in practice, the controllers determined the order of deliveries and collections, although the courier could ultimately decide on the routes.

In terms of equipment, couriers had to provide their own bike. CUK assigned them a call sign number, and a nickname. CUK also provided an ID badge, the opportunity to rent a Courier Pack containing branded uniforms, radio, and Citytrakker all for £10 a week. This handheld device was essential for the role, as couriers used it to sign in to "the circuit" and pick up jobs during the day. If they did not rent the Courier Pack, they would need to hire the device for £24 per week.

The Tribunal also considered other relevant terms in the Contract, including in respect of fees (which varied depending on the job), a requirement to be insured (which was also available through CUK for a weekly fee), the use of branded materials (stickers and clothes) – which were not compulsory, but a higher weekly rate was paid if they were used; and invoicing, for which there was a choice on paper, but it would have been difficult for the courier to issue.

Interestingly, the Tribunal also took note that CUK kept records at the office, of names, call signs, sign on status and times, along with details of individual couriers' holidays, absences and jobs completed. The Tribunal also considered CUK's website, and whether the content was helpful to the question of integration or control, most of which it deemed to be marketing "puff" and not helpful!

Outcome and Comment

The Tribunal found that CL were all workers when they were logged on to CUK's system. In reaching this decision, the Tribunal had considered in detail the paperwork held by CUK, and had heard first hand from both management and CL as to how the terms and conditions translated into practice. Although on most counts, it found that the Contract reflected actual practice, the lack of a realistic and workable right of substitution, the expectation of personal performance when signed on to the circuit, along with the overall arrangement which included elements of control, ultimately led the Tribunal to find against CUK. As a further blow to CUK, the Tribunal also found that previous payments to the workers had not included 'rolled up' holiday pay as it had not identified any sums in respect of holiday pay in a transparent or comprehensive manner.

Although the findings are not surprising in relation to a gig-economy business model, and despite the decision itself not being a precedent, this lengthy 29 page judgment is a useful reminder to employers, not only of the issues which can contribute to a finding of worker status, but also of the importance of ensuring that practices on the ground reflect what is set out in the contract.

If you'd like advice relating to any of the issues discussed in this article, please get in touch with our employment team.