Sintons Employment Law E-Bulletin – Issue 67


  • Deliveroo riders are not ‘workers’ – R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration Committee [2018] EWHC 3342 (Admin)
  • Uber drivers are ‘workers’ and not independent contractors – Uber B.V. v Aslam & ors [2018] EWCA Civ 2748
  • Government publishes Good Work Plan
  • Clause providing that agency workers would work ‘any five days out of seven’ was insufficiently detailed to engage the Swedish derogation – Twenty-Four Seven Recruitment Services Ltd and ors v Afonso and ors – UKEAT/0311/17/LA
  • The award of an enhanced pension scheme did not amount to “unfavourable treatment” for the purposes of section 15 of the Equality Act 2010Williams v The Trustees of Swansea University Pension & Assurance Scheme and another [2018] UKSC 65
  • Terms and Conditions – clarification of the obligation to provide written particulars of employment – Stefanko and others v Maritime Hotel Ltd – UKEAT/0024/18/OO

 

Deliveroo riders are not ‘workers’ – R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration Committee [2018] EWHC 3342 (Admin)

The High Court has rejected a judicial review challenge brought on behalf of Deliveroo riders against the finding that they are not ‘workers’ and are therefore unable to rely on the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A) and establish the right to collective bargaining arrangements. The argument that this breached Article 11 of the European Convention on Human Rights was also rejected, as it was held that Article 11 was not engaged.

Deliveroo drivers are engaged by the food delivery service under non-negotiable ‘supplier agreements’ as independent contractors on the following terms:

  • They are engaged following the completion of an interview, a telephone interview and a criminal records check that is paid for by Deliveroo;
  • They must supply their own method of transportation, along with a smartphone;
  • They must pay £150 for an ‘equipment pack’, which includes branded equipment and clothing;
  • Their work is arranged via a smartphone app, whereby the drivers mark themselves as available or unavailable and can choose which jobs to accept;
  • Their agreements state that there is no obligation on either party to provide or be available for and accept jobs;
  • They are also able to provide a substitute, who can be engaged by the driver, without Deliveroo’s prior approval.

The application, made by the IWGB on behalf of a group of Deliveroo drivers for collective bargaining, was rejected on the ground that they were not workers in accordance with s296 TULR(C)A. The argument hinged on the obligation of personal service, a key facet of ‘worker’ status and the issue in this case was the contractual right of the drivers to appoint a substitute. The CAC raised some concerns over whether the substitution provisions in the agreements were genuine, but nevertheless concluded that the drivers were not ‘workers’ due to the ‘almost unfettered right of substitution’. The IWGB applied to the High Court for judicial review of this decision but this application was dismissed.

This case contrasts recent decisions on employment status, notably the case concerning Uber drivers, who were found to be workers.

Uber drivers are ‘workers’ and not independent contractors – Uber B.V. v Aslam & ors [2018] EWCA Civ 2748

In Uber B.V. v Aslam & ors the Court of Appeal has upheld the decision of the Employment Appeal Tribunal and found that Uber drivers are ‘workers’ rather than self-employed contractors. It was also held that Uber drivers should be regarded as working at any time when they: are within their territory, have their app switched on, and are ready and willing to accept fares. The same decision had also been reached by the Employment Tribunal and Employment Appeal Tribunal previously.

It had to be determined whether the drivers performed a service for Uber, or whether Uber acted merely as an intermediary, providing booking and payment services, with the drivers carrying passengers as independent contractors. Despite the drivers’ contracts stating that they were independent contractors, it was held that this did not reflect the true nature of their relationship with Uber.

It was therefore concluded that they were ‘workers’ for the purposes of the National Minimum Wage Act 1998 and the Working Time Regulations 1998, meaning that they are entitled to holiday pay, paid rest breaks and the National Minimum Wage. It should be noted that Lord Justice Underhill gave a dissenting judgment in this case, and that the Court of Appeal has granted Uber permission to appeal its decision, which they have signalled their intent to do.

This decision should be borne in mind by employers as it highlights the importance of ensuring that the terms of the contract of employment reflect the true nature of the relationship that exists.

Government publishes Good Work Plan

The Government has this month published the Good Work Plan which contains a series of proposed changes to employment law, albeit there are no proposed dates for implementing some of the changes contained within this publication.

The key proposals contained within the Good Work Plan are:

  • To extend the gap required to break continuity of employment to four weeks. Currently a gap of one week in employment with the same employer can break what counts towards continuous service for calculating employment rights;
  • From 6 April 2020, The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 will come into force to make access to a written statement a day one right. Currently the statement must only be provided within two months. The information required in the statement will also be expanded to include;
    • How long a job is expected to last, or the end date of a fixed-term contract.
    • How much notice the employer and worker are required to give to terminate the agreement.
    • Details of eligibility for sick leave and pay.
    • Details of other types of paid leave e.g. maternity leave and paternity leave.
    • The duration and conditions of any probationary period.
    • All remuneration (not just pay) – contributions in cash or kind e.g. vouchers and lunch.
    • Which specific days and times workers are required to work.
  • In addition, The Employment Rights (Miscellaneous Amendments) Regulations 2019 extends the right to a written statement and the information referred to in the bullet point immediately above to workers as well as employees. Currently the statement must only be given to employees;
  • From 6 April 2020, The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 will extend the holiday pay reference period from 12 to 52 weeks;
  • To improve the clarity of the employment status tests to reflect the reality of modern working relationships and prevent employers from misclassifying or misleading their staff;
  • From 6 April 2020, The Agency Workers (Amendment) Regulations 2018 will abolish the Swedish derogation for agency workers. This currently enables employers to pay agency workers less than their own staff in certain circumstances;
  • To increase state enforcement protections for agency workers where they have pay withheld or unclear deductions made by an umbrella company;
  • To introduce a right for all workers to request a more predictable and stable contract. Those who are content to work varied hours each week will be able to continue. However, those who would like more certainty will be able to request a more fixed working pattern from their employer after 26 weeks of service; and
  • To require all employment businesses to provide every agency worker with a Key Facts Page.

While there are no dates for implementing some of the proposed changes mentioned in the Plan, employers should still bear them in mind and make plans to ensure compliance with the proposed changes to the legislation.

Clause providing that agency workers would work ‘any five days out of seven’ was insufficiently detailed to engage the Swedish derogation – Twenty-Four Seven Recruitment Services Ltd and ors v Afonso and ors

The ‘Swedish derogation’, contained in Regulation 10 of the Agency Workers Regulations 2010, enables an employer to pay agency workers a different rate to permanent members of staff.

In this case, the EAT found that agencies were not able to rely on the Swedish derogation when the workers’ contracts provided that their hours of work would be ‘any five days out of seven’. In accordance with Regulation 10(1)(a)(iii), for an employer to be able to rely on the derogation, the contract must specify the expected hours of work during any assignment.

The EAT upheld the Tribunal’s finding in favour of the workers on this point, concluding that in order to rely on Regulation 10(1)(a)(iii), a contract must detail the total number of hours to be worked per week, and not just per assignment. The EAT held that as the contracts in this case detailed neither, the agencies were unable to rely on the Swedish derogation.

In addition, Regulation 10(1)(a) stipulates that the contract must contain terms and conditions relating to ‘the minimum scale or rate of remuneration or the method of calculating remuneration’. In this instance, the contracts stated that ‘your rates of pay will at all times be no less than the National Minimum Wage (NMW) currently in force per hour worked.’ It was held by the Tribunal that this was not sufficient to satisfy Regulation 10(1)(a). The EAT found that the Tribunal had been incorrect to find this.

Nevertheless, the agencies’ appeal was dismissed and the Tribunal’s conclusion that they were unable to rely on the Swedish derogation in this case was upheld. This decision ought to be borne in mind by both agencies and employers who use agency staff.

The award of an enhanced pension scheme did not amount to “unfavourable treatment” for the purposes of section 15 of the Equality Act 2010Williams v The Trustees of Swansea University Pension & Assurance Scheme and another [2018] UKSC 65

In Williams v Trustees of Swansea University Pension, the Supreme Court held that awarding an enhanced pension on medical retirement, where the amount was calculated based on part-time salary because the employee was working part-time as a result of disability, was not deemed to be “unfavourable treatment” under section 15 of the Equality Act 2010.

Mr Williams worked for Swansea University (“the University”) from 12 June 2000 until retirement for ill-health reasons on 30 June 2013, aged 38. He suffered from Tourette’s and other conditions which satisfied the definition of “disability under section 6 of the Equality Act 2010. He had been an active member of the University’s pension scheme throughout his employment.

For the first ten years of his employment Mr Williams worked full time. From then on, he worked anything from 17.5 – 26 hours per week when he was fit to work. By June 2013, his agreed hours of work were 17.5 hours per week, although he had not been working for around 11 months. Every reduction in his working hours was as a result of his disability and the University agreed this. The reductions in working hours were made at the request of Mr Williams as a “reasonable adjustment”.

At the end of his employment, Mr Williams was entitled to receive his pension immediately, based on his final salary. He brought a claim, arguing that basing the pension on his final salary amounted to discrimination arising from his disability, contrary to s15 of the Equality Act 2010. He argued that it ought to have been based on his salary prior to the adjustments made to his working hours.

The Employment Tribunal at first instance agreed with Mr Williams. However, on appeal the EAT, Court of Appeal and Supreme Court all agreed with the University and held that he had not suffered “unfavourable treatment”. The Supreme Court held that there was nothing inherently disadvantageous about the award of a pension to Mr Williams.

This case may provide useful guidance for employers dealing with employees wishing to take ill-health retirement.

Terms and Conditions – clarification of the obligation to provide written particulars of employment – Stefanko and others v Maritime Hotel Ltd – UKEAT/0024/18/OO

The EAT has held in Stefanko and others v Maritime Hotel Ltd that provided an employee has worked continuously for at least 1 month, they are entitled to a statement of employment particulars, even if they are employed for less than 2 months.

In accordance with Section 1(2) of the Employment Rights Act 1996 (ERA 1996), an employee is entitled to a written statement of employment particulars within 2 months of the commencement of their employment. The failure to provide this may entitle the employee to additional compensation if they bring a successful tribunal claim for another substantive reason.

The Claimants in this case were all waiting staff employed by the Maritime Hotel for relatively short periods of time. One of the Claimants, Mrs Woronowicz, succeeded in a claim for automatically unfair dismissal. Despite having been employed for only 6 weeks, the EAT held that the award ought to be increased as a result of a failure to provide either a payslip or statement of employment particulars.

It was decided that at first instance the Tribunal had been incorrect to find that Mrs Woronowicz had not been entitled to an increased award as she did not have 2 months’ continuous employment. The EAT concluded that, in accordance with section 2(6) ERA 1996, Mrs Woronowicz was entitled to the statement despite her employment ending before the 2 months were up.

This decision should be borne in mind by employers who engage staff on relatively short-term contracts. It is also worth noting that with effect from 6 April 2020, new legislation will come into force affording every employee and worker the right to a statement of employment particulars from day one of their employment.


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