When considering whether a person is an employee, worker or subcontractor, one aspect of the test is whether the person concerned has to undertake the work personally or whether they can appoint someone else to do it (a right of substitution).
In Stuart Delivery Ltd v Augustine, the Employment Tribunal was asked to consider the case where a courier company had developed a technology platform to allocate delivery slots. In it couriers opted to take ‘ad hoc’ or ‘slot’ deliveries. Where a courier committed to undertake ‘slot’ deliveries they were required to be available in a set place at a set time in return for a fee. Once committed to a slot, a courier was required to be available unless someone else agreed to take it from them. When Augustine (A) sought to bring a case against SD Ltd, the Tribunal had to consider whether this represented an obligation to perform services personally, as required for ‘worker’ status under S.230(3)(b) ERA.
The Tribunal found that the release procedure did not amount to an unfettered right of substitution, as A would only be released from his obligation to undertake the slot if another courier signed up and he had no control over whether this happened. The Tribunal concluded that this was in the fifth category of substitution identified by Sir Terence Etherton MR in the Court of Appeal in Pimlico Plumbers Ltd and anor v Smith, i.e. ‘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 personal performance.
On appeal, the EAT agreed with the Tribunal’s analysis. On the facts, the Tribunal was right to find that there was no right of substitution or, in the alternative, there was a limited right falling within the fifth category. SD Ltd appealed to the Court of Appeal on the question of A’s right of substitution.
In dismissing the appeal, the Court of Appeal confirmed that the issue for a Tribunal is whether a claimant is under an obligation personally to perform the work or provide the services. It is to be noted that the categories identified in Pimlico Plumbers Ltd are a summary of the principles to be drawn from and not a rigid classification to be strictly followed. The Court of Appeal noted that, in any event, the Supreme Court had subsequently reviewed the correct approach to determining whether a person is a worker in some detail in Uber BV and ors v Aslam and ors.
In Conclusion
Going forward, it is unlikely that a simple right to substitute another approved person will not be enough to avoid the definition of a worker where the person remains liable to perform the role if no alternate is found.
A limited right or ability to notify other employees/workers/sub-contractors that a person wishes to be released from an obligation will, in reality, be an insufficient right of substitution to remove from him that obligation to perform his work personally.
As always, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) 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.
