September 27, 2019

In recent years there have been a number of high profile cases regarding employment status, particularly over individuals working in the “gig economy”.

It is important for business owners to understand the main issues to avoid falling foul of the law.

Typically, workers who are not guaranteed work, and who are not obliged to accept work when it is offered to them are known as “workers”.

They are entitled (amongst other things) to be paid at the prevailing National Minimum Wage and receive paid holidays, whereas those who are genuinely self-employed do not have these rights. 

Usually, the test for determining whether individuals are “workers” involves looking at how they provide the services.

Commonly, this includes whether they have to perform the work themselves or whether they can send a substitute in their place.

An Employment Judge sitting in the Watford Employment Tribunal however has recently referred a series of questions concerning “worker” status to the European Court of Justice, and the decision could set a precedent for the future for business owners.

It is really important to understand employment law from a business perspective, so let’s look a little closer at this case. 

The Case

The case, which came to light earlier this week, concerned a Yodel courier.

The question posed was what exactly the term “worker” meant under EU laws and regulations, particularly whether economy-gig workers can use substitutes, and whether that means they cannot be classed as a “worker” in law.

A Yodel delivery driver used his own vehicle, uniform, and mobile, while using only a branded Yodel scanning device.

The controversy seemed to surround the fact that the courier was eligible to outsource his deliveries and was permitted to carry out deliveries for other companies at the same time.

This right would normally point towards self-employment rather than “worker” status and as self employed individuals are excluded from many of the usual employment rights such as holidays, the implications could be significant. 

The courier claimed he was not doing any of these things, and that, as he had only been conducting deliveries for Yodel, he should be classed as a worker.

When beginning his tenure and in 2017, he signed a contract that stated self-employed contractors should not be classed as workers.

He disputes this claim and says that because he never subcontracted his work with Yodel, he should be classed as a worker, despite the contract stating otherwise. 

Why This Matters

The rules which underpin “worker” status, namely the Working Time Regulations 1998, stem from European Law and this case is important because the UK courts’ subsequent interpretation of the law may not necessarily accord with the original European legislation. 

The current understanding of “worker” status could change entirely depending on how the European Court of Justice answers the questions. 

Now, another reason why this matters is that Brexit is looming large, and once the UK leaves the European Union, this is going to complicate matters of employment even more.

Particularly if UK-based companies have a global pool of staff, and have a presence in other countries in Europe.

This is something that is going to mean there are potentially different laws surrounding workers in the same job roles in both the UK and the EU.

There are a lot of things that need to play a role in running a business effectively, and understanding how the business world works is really important when it comes to improving this.

As you can see from this case, there are still a lot of employment laws that require clarification and it is more important than ever to stay abreast of the latest developments. 

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About the author 

James Rowland

James is the Commercial Director at Neathouse Partners and regularly writes articles surrounding issues in HR & Employment Law. Outside of the office, James is a keen Cricketer, playing in the Cheshire League for Nantwich CC. He also loves going to watch his football team, Crewe Alexandra. Feel free to connect with James on LinkedIn.

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