Employment Status Update

This week the Manchester Employment Tribunal will consider the employment status of Jess Varnish, the former British track sprinter.

Varnish is attempting to prove that prior to her dismissal in 2016 she was effectively “employed” by British Cycling, rather than merely being a funded athlete.

The Claimant has issued proceedings against British Cycling and UK Sport alleging unfair dismissal, sex discrimination, victimisation and detriment suffered as a result of whistleblowing. A preliminary hearing is being held to establish whether she is an employee or worker and is therefore afforded the protection to pursue these claims or alternatively if she is deemed to be self employed, in which case the claims will not be allowed to proceed.

If the Claimant succeeds, the implications of this ruling will be far reaching, forcing UK Sport to rethink its current engagement of sports men and women, with potentially significant consequences upon its tax and pensions liability.

This case follows a raft of litigation in the last 12 months regarding employment status.

Both employee and worker come with protections against discrimination, the right to be paid the National Minimum Wage, paid holiday, sick pay, maternity pay/paternity pay and whistleblowing protection.

A worker is defined under section 230(3) of the Employment Rights Act 1996 (ERA 1996) and regulation 2(1) of the Working Time Regulations 1998 (WTR 1998) as an individual who has entered into or works under (or, where the employment has ceased, worked under):

  • A contract of employment.
  • 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 of any profession or business undertaking carried on by the individual. (This is sometimes referred to as a “limb (b)” worker contract.)

The Equality Act 2010 (EqA 2010) defines an employee as an individual who is employed “…under a contract of employment…or a contract personally to do work” (section 83(2), EqA 2010). A contract personally to do work has been held to mean, in essence, the same as a limb (b) contract.

 

An individual who does not work under a contract of employment and who does not come within the limb (b) worker test or the extended definition of employee is often described as being truly self-employed or a truly independent contractor.

 

The Courts have tended to find in favour of Claimants, confirming worker status, as can be seen from the following cases:

Case Status Judgment
Gascoigne v Addison Lee LtdJudgment delivered on 11 May 2018The EAT upheld an employment tribunal’s finding that a cycle courier working for Addison Lee was a worker under the Working Time Regulations 1998 and the Employment Rights Act 1996 (ERA 1996), not a genuinely self-employed independent contractor, and was therefore entitled to statutory holiday pay.
Pimlico Plumbers Ltd v SmithJudgment delivered on 13 June 2018The Supreme Court upheld the judgments of an employment tribunal, the EAT and the Court of Appeal that a plumber was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998 as well as being an employee within the extended meaning of that term in the Equality Act 2010. This finding was despite the plumber’s contract labelling him as an independent contractor.
Uber B.V v AslamHeard on 30 & 31 October 2018 in the Court of Appeal10/11/2017 – The EAT upheld an employment tribunal’s ruling that Uber drivers are workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998.
Addison Lee Ltd v Lange and othersJudgment delivered on 14 November 2018The EAT has confirmed that Addison Lee drivers are workers under the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998. The EAT upheld the employment tribunal’s finding that there was an overarching contract between the parties. It also agreed that, in the alternative, the drivers were workers whenever they were logged on to Addison Lee’s system.
R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration CommitteeJudgment delivered on 5 December 2018A tribunal claim by Deliveroo riders on employment status for minimum wage and holiday purposes was settled in June 2018.

 

On 14 and 15 November 2018, the High Court heard the judicial review challenge to the CAC’s decision. The IWGB argued that collective bargaining rights are an essential element of Article 11 of the European Convention on Human Rights (freedom of association), and that the definition of “worker” under TULRCA should be construed in such a way that did not exclude delivery riders from exercising these rights.

The High Court dismissed the challenge, finding that all the European Court of Human Rights cases relied on did not extend Article 11 rights outside an employment relationship, and there was no employment relationship in the present case.

 

 

If you feel that you need any further advice if this affects your business, please feel free to contact us to discuss further on 0113 3229222

 

 

 

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