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Employment Status- what is the reality?

As we have seen with the Uber case, it is the reality of the situation that matters.

In the case of Uber, the Court reiterated that it is not what the written contract states that should be the starting point, but the reality of the situation and the level of control exercised over the individuals. Rights are created by legislation, not the contract of employment.

The recent case of Stuart Delivery Ltd v Augustine provides further insight into worker status. Mr Augustine was a delivery courier, undertaking fixed hours ‘slots’ for Stuart Delivery Limited (SDL). During the slots Mr Augustine was under the control of SDL, he was not able to leave the zones he had agreed to work in and was required to undertake the deliveries offered to him, in return for a guaranteed hourly wage. He could not make himself available to other delivery companies during the period (typically 3 hours) of the slots.

The Court of Appeal has maintained the Employment Tribunal’s decision that Mr Augustine, who could release a delivery slot that he had agreed to undertake to another courier, via a smartphone app, worked under a contract for the personal performance of services, satisfying the definition of “worker” under section 230(3)(b) of the Employment Rights Act 1996.

The Tribunal had found that the ability to release a slot did not amount to an unfettered right of substitution, since Mr Augustine would only be released from his obligation if another courier signed up, and he had no control over whether that happened or who, if anyone, signed up.

In reality, having signed up for a slot, Mr Augustine was obliged to personally perform because there was a real risk of punishment for not doing so. The Tribunal found this to be “a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent”, which is consistent with an obligation of personal performance (the fifth category of substitution identified in in Pimlico Plumbers Ltd and another v Smith). In addition, the Tribunal’s conclusion that Mr Augustine was not in business on his own account and that SDL was not a customer of Mr Augustine’s delivery business could not be criticised.

The Court held that the “categories” set out in the Pimlico Plumbers case should not be regarded as a rigid classification about what amounts to personal performance, or when a right of substitution would deny the existence of an obligation to do work personally. It will generally not help to try and shoehorn the particular facts of a case into one of the Pimlico Plumbers categories and then treat that as establishing fact on the issue of personal performance.

In Stuart Delivery Ltd v Augustine, the Court held that the Tribunal had considered all the relevant matters when considering whether any right or ability on the part of Mr Augustine to substitute another person was inconsistent with an obligation of personal performance. The system was intended to ensure that the courier turned up for the slots that he had signed up for, and performed the delivery work during those time slots. That was required for the business model to work. The limited right or ability for the courier to notify other couriers that he wished to release that slot was not, in reality, a sufficient right of substitution to remove from him that obligation to perform his work personally.

Get in touch with our Employment Solicitors if you are unsure of employment status!


Employment Status- what is the reality?

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