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Gig Economy – an update on ‘Worker’ status

The European Court of Justice has recently given a ruling in the case of B v Yodel Delivery Network Ltd regarding the ‘worker’ classification under EU law.

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Published 1 May 2020

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  • Employment law for employers

The status of workers within the gig economy has been a fast-developing area, and the European Court of Justice has recently given a ruling in the case of B v Yodel Delivery Network Ltd after the Watford Employment Tribunal referred a series of questions to them regarding the ‘worker’ classification under EU law.

B worked as a delivery driver for Yodel, and the courier services agreement stated that he was a self-employed independent contractor. B made a claim for holiday pay asserting that he had worker status.

The specific facts of the case were considered and found that B was not obliged to perform the delivery personally and could appoint substitutes for the whole or part of the service provided to Yodel although Yodel had the power to veto the substitute if they were not suitably qualified. B could set a limit on the number of parcels he chose to deliver and had some flexibility on when to deliver them and could work for a competitor without restrictions.

The Law

Domestic UK employment law focuses on the contractual rights and obligations of the worker and the employer. Absent of a contractual obligation to provide ‘personal service’ an individual cannot be regarded as a ‘worker’. Therefore, as a matter of domestic law, B’s right to sub-contract the performance of his work was fatal to his claim of ‘worker’ status and holiday pay.

The employment tribunal asked the ECJ for clarification on whether (as in UK law) the fact that B had the right to engage substitutes to perform all or part of the work meant that he could not be considered a ‘worker’ for the purposes of the Working Time Regulations 1998.

The ECJ noted that B’s independence was not fictitious because B had the freedom to use substitutes to perform the service, could choose to not accept the tasks offered by Yodel and could also work for other courier companies.

The ECJ also held that there was no relationship of subordination between B and Yodel and given these factors  his independence as a self-employed contractor was genuine.

In this case, therefore, the ECJ indicated that B would not have worker status, however, the case has been referred back to , the Watford Employment Tribunal to make a final decision.

The ECJ’s ruling could have a significant impact on the gig economy and how worker status is determined in the UK because it confirmed that a self-employed contractor can have worker status if their independence from their putative employer is fictious or a sham although this was not found to be so in B’s case.

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Shorter Reads

Gig Economy – an update on ‘Worker’ status

The European Court of Justice has recently given a ruling in the case of B v Yodel Delivery Network Ltd regarding the ‘worker’ classification under EU law.

Published 1 May 2020

Associated sectors / services

Authors

The status of workers within the gig economy has been a fast-developing area, and the European Court of Justice has recently given a ruling in the case of B v Yodel Delivery Network Ltd after the Watford Employment Tribunal referred a series of questions to them regarding the ‘worker’ classification under EU law.

B worked as a delivery driver for Yodel, and the courier services agreement stated that he was a self-employed independent contractor. B made a claim for holiday pay asserting that he had worker status.

The specific facts of the case were considered and found that B was not obliged to perform the delivery personally and could appoint substitutes for the whole or part of the service provided to Yodel although Yodel had the power to veto the substitute if they were not suitably qualified. B could set a limit on the number of parcels he chose to deliver and had some flexibility on when to deliver them and could work for a competitor without restrictions.

The Law

Domestic UK employment law focuses on the contractual rights and obligations of the worker and the employer. Absent of a contractual obligation to provide ‘personal service’ an individual cannot be regarded as a ‘worker’. Therefore, as a matter of domestic law, B’s right to sub-contract the performance of his work was fatal to his claim of ‘worker’ status and holiday pay.

The employment tribunal asked the ECJ for clarification on whether (as in UK law) the fact that B had the right to engage substitutes to perform all or part of the work meant that he could not be considered a ‘worker’ for the purposes of the Working Time Regulations 1998.

The ECJ noted that B’s independence was not fictitious because B had the freedom to use substitutes to perform the service, could choose to not accept the tasks offered by Yodel and could also work for other courier companies.

The ECJ also held that there was no relationship of subordination between B and Yodel and given these factors  his independence as a self-employed contractor was genuine.

In this case, therefore, the ECJ indicated that B would not have worker status, however, the case has been referred back to , the Watford Employment Tribunal to make a final decision.

The ECJ’s ruling could have a significant impact on the gig economy and how worker status is determined in the UK because it confirmed that a self-employed contractor can have worker status if their independence from their putative employer is fictious or a sham although this was not found to be so in B’s case.

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