The Tribunals frequently have to grapple with the question of worker ‘status’ in UK Employment Law because there are different definitions. The three main categories of status are (1) an “employee”, (2) a “worker” and (3) those who are genuinely “self-employed”.
It’s generally held in law that a substitution clause in a person’s service contract (meaning they can substitute another person to do the work for them) is a strong indicator of self-employment.
In a recent Employment Appeal Tribunal (EAT) case, Stuart Delivery Limited v Augustine this question arose and the Employment Appeal Tribunal (EAT) had to consider whether a substitution clause in the person’s service contract automatically meant they were denied ‘worker’ status.
Facts
Mr Augustine was a delivery courier, undertaking fixed hours 'slots' for Stuart Delivery Limited (SDL). During the slot Augustine was under the control of SDL, he was unable to leave the zone he had agreed to operate in and was required to undertake the deliveries offered to him in return for a guaranteed hourly wage. He could not hold himself out as available to other delivery companies during the period (typically 3 hours) of a slot. A tribunal considered the arrangement whereby Augustine could release a slot he had signed up to back into the pool of approved couriers via SDL's Staffomatic app was not of the character of a substitution clause which would deny him ‘worker’ status.
The EAT agreed. The tribunal had correctly found that Augustine would only be released from the obligation of performing the slot himself if another courier signed up for it and that he had no control over whether, or who, picked up the slot he had released. This therefore did not amount to a 'right' of substitution, or a provision that was inconsistent with worker status.
Comment
Here the restrictions on the right to substitute in reality meant that Mr Augustine was not self-employed and was a worker. The Tribunals often scrutinise such substitution clauses in detail to ensure that employers are not using the more beneficial tax and national insurance arrangements associated with self-employment (and the lesser employment rights attracted to self-employment) to their unfair commercial advantage.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Legal Ltd) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
