UK: Gig Economy and Employment Status
An individual who provides a personal service would usually be classed as a worker under UK law unless they were able to provide a substitute to provide the services instead.
Mr Augustine worked as a courier for Stuart Delivery Ltd. Couriers who signed up for a time slot via a mobile app, committing them to being available in a certain area at a certain time, would receive a minimum rate of £9 per hour. A courier could release the slot via the app making it available to other couriers but if no one accepted the slot, the original courier would be liable for completing it, or incurred a penalty for failing to do so.
When his contract ended, Mr Augustine claimed unfair dismissal, notice pay and arrears of pay. The employment tribunal found he was a worker and not an employee. His case eventually ended up in the Court of Appeal which agreed with the employment tribunal’s decision. The Court of Appeal found that the tribunal had correctly identified the relevant issue for determining worker status – namely personal performance under a contract – and whether any right or ability on the part of Mr Augustine to substitute another person was inconsistent with an obligation of personal performance. Stuart Delivery had set up a system which ensured that couriers turned up for their slots. The limited ability of Mr Augustine to notify other couriers that he wished to release a slot was not, in reality, a sufficient right of substitution which removed him from that obligation to perform work personally. Mr Augustine did not know which courier would take up the slot and could not put forward any given individual to do so.
Key Action Points for Human Resources and In-house Counsel
This is an important decision in a growing line of employment status cases arising out of the gig economy. The court will look at the reality of the situation, and in every case, determine whether the individual is under an obligation to provide their services personally (in which case they will be either a worker or an employee). Whether the individual is providing personal service comes down to whether they have a right or ability to appoint a substitute. So the real issue in every case will be the nature and degree of any restriction on the individual’s ability to appoint a substitute, and the extent to which that is inconsistent with an obligation of personal performance.