Worker Status – Court of Appeal Decision

12th November 2021 Employment

In Stuart Delivery Ltd v Augustine, the UK Court of Appeal confirmed that a courier who could release a delivery slot that he had signed up to cover to other couriers worked under a contract for the personal performance of services, therefore satisfying the definition of ‘worker’, despite having a limited right of substitution.

What happened?

Mr Augustine worked for Stuart Delivery Ltd as a courier, which utilised a technology platform connecting couriers with clients via a mobile app. Mr Augustine could accept jobs on an ad-hoc basis, or sign up to work at particular times, which were referred to as slots. There were financial incentives to sign up to slots. If a courier either could not or did not want to work a slot which they had agreed to, they could offer it to other couriers on the platform. However, if no-one else agreed to work the slot, there were penalties if the original courier did not do so.

When the relationship ended, Mr Augustine claimed that he was a worker and as such entitled not to have unauthorised deductions made from his pay and protected under the Working Time Regulations. Stuart Delivery argued that he was not a worker on the grounds he was not obliged to perform services personally. The obligation to provide services personally is a pre-requisite for a worker relationship.

The employment tribunal and EAT upheld the claims, finding that Mr Augustine’s right to offer a slot to a substitute did not negate the requirement to provide services personally. Stuart Delivery appealed to the Court of Appeal, arguing that the tribunal and EAT had misunderstood earlier case law on the right of substitution.

Court of Appeal

The Court of Appeal dismissed the appeal. The fundamental issue was whether the claimant undertook to perform personally work or services for Stuart Delivery. The Court of Appeal considered the case of Pimlico Plumbers v Smith [2017] in relation to when a right to send a substitute negated an obligation of personal service.

In this case the tribunal had decided that the right of substitution was not inconsistent with a personal service obligation. The system was designed to ensure that couriers worked the slots for which they had signed up. A limited right to notify other couriers who were already working for the organisation that an individual was prepared to release a slot was not a sufficient right of substitution to remove the obligation personally to perform work.

It held that the tribunal were entitled to find that Mr Augustine was a worker within the meaning of section 230(3)(b) of the Employment Rights Act 1996.

Next steps 

This is another example of tribunals and courts looking to the reality of a situation when deciding issues of employment and worker status, particularly arising out of the gig economy. As the Court of Appeal observed, the examples given in Pimlico Plumbers v Smith of what types of rights of substitution may or may not negate an obligation to provide service personally are just that, examples. They do not set down rigid classifications that are binding on other courts.

Each case will need to be determined on the facts in order to address whether the nature and degree of any fetter on the right or ability to appoint a substitute is inconsistent with an obligation of personal performance.

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Simon Bloch is a Partner located in Manchester in our Employment department

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