Stuart Delivery Ltd v Augustiner

The Court of Appeal has upheld earlier decisions of the ET and EAT in another gig economy case, confirming that the ability to offer a piece of work to a substitute does not mean that the service is not provided personally, and therefore does not mean they cannot be found to be a worker.

LAW

Section 230(3) of the Employment Rights Act 1996 defines a worker as someone who has “entered into or works under a:

  • contract of employment or
  • any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer or any profession or business undertaking carried on by the individual

Sub-section (a) confirms that all employees are workers and, as such, are entitled to worker rights. 

What rights a worker has will depend on their status under employment law. This can be determined by the contractual documentation, or where the contract does not reflect the reality of the arrangement, it is necessary to look at how the arrangement operates in practice. 

In Pimlico Plumbers v Smith [2017] the Court of Appeal was asked to consider whether the obligations to provide personal service was negated by a right to send a substitute in the documentation. The court held that: 

  • An unfettered right of substitution is inconsistent with an obligation to perform work personally; and
  • A conditional right to substitute may or may not be inconsistent with personal service, depending on the conditions that attach to the exercise of the right.

FACTS 

In this case, the claimant worked as a courier for Stuart Delivery. Jobs could either be accepted on an ad-hoc basis, or pre-arranged by signing up for particular time slots (known as ‘slots’), which had additional financial incentives over ad hoc work. If the courier then could not, or didn’t want to, work that ‘slot’ they could offer it to other couriers on the same platform, but if no-one else took it, there would be penalties for the original courier. 

The claimant brought a claim that he was actually a worker during the time working for Stuart, and therefore unauthorised deductions from pay were prohibited, and he was able to enforce rights under the WTR. 

EMPLOYMENT TRIBUNAL (ET)

The ET upheld the claim that the claimant was a worker, referring to the decision in the above Pimlico Plumbers case and finding that the right here was not unfettered, and the conditions attached to it were such that the service was in fact personal. Indeed, it was questioned if there was the right of substitution (argued by the respondent) at all. It was not found in the contract, and merely existed as the ability to notify others of the availability of the slot via the shared platform used to register for work. 

EMPLOYMENT APPEALS TRIBUNAL (EAT)

Having been successful in this claim at ET, the matter was appealed to the EAT by the respondent on the basis that the ET had erred in law in its understanding of worker status, and that the right of substitution in the agreement meant that he was not required to perform the work personally. 

This was rejected by the EAT, who stated that “… it is not a right of substitution at all. It is merely a right to hope that someone else in the pool will relieve you of your obligation. If not, you have to work the slot yourself. You cannot, for example, get your mate to do it for you, even if s/he is well qualified. All you can do is release your slot back into the pool.”.

COURT OF APPEAL (COA)

The question of status, and in particular the right of substitution, was then put before the COA. The decisions of the ET and EAT were both upheld by this court, which found that there was an obligation of personal performance given the nature and extent of the practice of permitting substitution in operation here. 

The appeal was dismissed.

Note for employers 

Whilst this case does not set down strict guidelines for when the ability to substitute will negate personal service, it does give us insight into how the courts are continuing to approach these cases. This case showed the courts willingness to look at the matter as a whole, and the practicalities attached to the ability to pass work onto another. 

Therefore employers need to be careful about how they operate in areas such as this. Contracts need to be carefully written and followed in practice to ensure the employer is implementing the sort of working relationship it wants for its business.

« Back to News