On Friday 6 January 2017 the London Central Employment Tribunal gave judgment in the case of Dewhurst -v- CitySprint.
The judgment (attached) is the second landmark decision in a series of cases which focus on the employment status and rights of individuals working within the so-called ‘gig economy’.
In a judgment that echoes the finding against Uber, published in October 2016, the Tribunal ruled against CitySprint (the UK’s largest courier company). It concluded that the Claimant, Ms Dewhurst who works as a cycle courier with CitySprint, is a “worker” and therefore is entitled to certain basic protections including the national minimum wage and paid holiday.
The case against CitySprint was the first in a series of co-ordinated legal actions against the UK’s major courier companies.
CitySprint describes itself as “the UK’s largest and fastest-growing same day courier business”. It operates 365 days of the year and uses about 3,200 ‘self-employed’ couriers.
Ms Dewhurst started work as a cycle courier with the Respondent in 2011. She underwent a two-day recruitment process, which consisted of an interview, a DBS background check, a knowledge test and training.
Prior to starting work, Ms Dewhurst was required to sign a contract entitled “Confirmation of Tender to Supply Courier Services to CitySprint (UK) Limited” (“The Tender”).
The Tender, which was described by the Judge as “almost indecipherable” categorises CitySprint’s couriers as “Contractors” and includes the following terms:
- The Contractor has discretion to determine the manner in which the Services are performed at all times;
- CitySprint has no obligation to offer the Contractor work at any time and the Contractor has no obligation to accept any particular Job;
- The Contractor may accept and undertake work from other persons or organisations whilst in the process of undertaking Jobs;
- The Contractor may at his own cost provide a substitute to perform any particular Job; and
- The Contractor will at all times maintain insurance.
The Tender was not in fact physically signed and a hard copy was not provided. Instead, Ms Dewhurst was required to go through an electronic tick list acknowledging the key terms by clicking “Yes” to phrases which emphasised the purported nature of the relationship (for instance The Tender stated: “As a self-employed contractor I will not be entitled to holiday sick maternity payments (sic).”
Typically, Ms Dewhurst works four days a week. She starts her day at 9.30 am and finishes at approximately 6.30 pm. On an average working day, Ms Dewhurst cycles over 50 miles picking up and delivering consignments to hospitals and clinics across London, including blood, medicines and medical supplies. She is paid per consignment at a fixed rate set by CitySprint.
Ms Dewhurst receives jobs via a sophisticated GPS device called a ‘CityTrakker’. CitySprint use the CityTrakker to monitor the movement of its couriers, issue instructions and allocate work.
The Tribunal’s Judgment
In broad terms, in order to successfully defend the claim, the Respondent needed to show that cycle couriers are, in effect, a network of independent businesses. The clauses within The Tender certainly conveyed that impression (suggesting that cycle couriers could accept or reject work, determine the manner in which jobs were carried out, provide substitutes, work for a range of companies etc.).
However, the Tribunal rejected the Respondent’s arguments describing the contract as “contorted and self-destructive” and “window dressing”.
The tribunal considered that the Claimant fell within the definition of "worker" for the purposes of the Employment Rights Act, and the judgment considers various elements of the relationship, such as control, integration and personal service.
In relation to control, the Tribunal concluded: “Despite (CitySprint’s) protestations I conclude that the Respondents do exercise a level of control over the working patterns of their couriers because the business model on both sides requires a level of consistency…” and “…couriers feel obliged to do as they are told…”.
The Tribunal did not accept that Ms Dewhurst had discretion as to how her role was carried out or that her relationship with CitySprint was that of an independent business and a commercial client. In this regard, the Tribunal’s judgment states: “The Claimant submits that on any view she was recruited by CitySprint to work for it as an integral part and I agree this was the case. As a worker in a subordinate position the Claimant is a typical example of the protection needed from the Working Time Directives…Overall [couriers] have little autonomy to determine the manner in which their services are performed and no chance at all to dictate its terms”.
Integration into business
The Tribunal found that the couriers were integrated into the business, rather than maintaining an arm’s-length relationship with CitySprint. CityTrakkers, radio and personal mobile phones are used to discuss jobs. Couriers are told that they are part of the CitySprint “family” and indeed, the Tribunal found that “the couriers regard themselves as part of the CitySprint family, for better and for worse”. The Tribunal also held that CitySprint’s statement, published on their website - “our couriers” provide a “secure dedicated service” - could not be dismissed as “advertising puff” because it is a key part of the sales pitch.
In relation to substitution, the Tribunal decided as follows: “The opportunity available to Ms Dewhurst [to substitute] is so small that it cannot be said to show that she did not render personal service to the Respondent…I conclude that the substitution clause in the Tender does not have the effect that the Respondent argues for”.
The Tribunal concluded that, in reality, there was no reason why Ms Dewhurst would subcontract work. A number of reasons were given to support the Tribunal’s conclusion:
- Ms Dewhurst could not give her ID badge to a substitute;
- The clause is so prescriptive that only existing CitySprint couriers would be able to act as substitute; and
- It would be in breach of CitySprint’s contract with its client (HCA) to allow Ms Dewhurst to substitute.
As regards personal service, the Tribunal concluded that: “In this case Ms Dewhurst is in a simple binary relationship with the respondent; one courier working personally for one organisation at any one time and any concept of her operating a business is a sham.”
Although the Respondent’s witnesses denied that couriers had to wear CitySprint uniform, the Tribunal noted that the Respondent requires a professional looking fleet and commented it would be “very odd if no branding was required.”
Pay and invoicing
CitySprint set different tariffs for each job depending on the location and urgency. The couriers are then paid by job, less fixed deductions for uniform and insurance. As regards invoicing, the Tribunal found that in practice “individual couriers do not touch the invoice from beginning to end and they wait to be paid each Friday in arrears.”
The Tribunal concluded that the invoice was “a payslip in all but name” and that “Ms Dewhurst relied completely on the respondent’s system which calculates payments due to her …”
Inequality of bargaining power
The Tribunal emphasised that The Tender did not reflect what happened in practice “There was a clear inequality of bargaining power and the true situation is very different from that portrayed in the Tender, starting with the name of the document itself as there was no tender process at all”. The Judgment goes on to state: “…the claimant is both economically and organisationally dependent upon CitySprint not only for her livelihood but also for how it is earned.”
It is clear that there is significant momentum behind these types of claims at the moment. The government has commissioned a review, and there is an increasing backlog of cases that are looking at the appropriateness/ legitimacy of self-employed status.
These claims pose significant risks to organisations, both from a tax perspective and from an employment perspective.
Unlike many firms in the city, BWB advise both individuals and employers in relation to employment status. If you have any questions arising from the content of this article please don’t hesitate to contact Paul Jennings on 0207 551 7694.
Posted on 10/01/2017 in Legal UpdatesBack to Knowledge