Courier case: are we anywhere near the end of the road or just on our way?

6 February 2017

The decision (dated 5 January 2017) in the recent cycle courier case Dewhurst v CitySprint UK Limited that received TV coverage last month is not strictly speaking an authoritative judgment. But it does evidence a direction of travel, following as it does the hugely well published judgment in the Uber case last October (Aslam and Farrer v Uber B.V. and others).  Please pardon the analogy!

Margaret Dewhurst is a cycle courier.  Although originally claiming to be an employee, the case she ultimately brought to the Tribunal was that her status was as a "limb (b) worker" pursuant to section 230(3)(b) of the Employment Rights Act.  She said she undertook to perform personally her services as a courier for CitySprint.  She claimed two days’ holiday for which she was not paid.

The contract Ms Dewhurst signed sought to set out the business relationship between the parties.  In the usual manner of things in these cases, it provided for her to agree and warrant that she was a self-employed contractor and that she was neither an employee nor a worker. It then set out the various terms and conditions including the ability of the contractor to provide a substitute to perform any job at her own cost.  Ms Dewhurst said it did not reflect the reality.  She did nonetheless accept that if the actual arrangement was as set out in the Agreement, she could not be a worker.

Many contracts are drawn up in this way.  We should therefore note that the Judge in the case (EJ Wade) said “The very title of the document “Confirmation of Tender to Supply Courier Services to CitySprint” arouses the suspicion that the contract may have been generated by (an) army of lawyers…”  As a lawyer, I could not possibly comment….

Two of the important issues for EJ Wade to decide were:

  1. If the contract did not express the true agreement, what was the true agreement between the parties, and;
  2. Was Ms Dewhurst a so called "limb (b) worker" under the true agreement (which would entitle her to rights she would not have enjoyed had she been genuinely self-employed – such as holiday pay)?

With parallels to the Uber case so far as payment was concerned, the individual couriers were not at all involved in the invoice for their services from beginning to end.  They simply waited to be paid.  In one sense, this could be said to have been of benefit to the couriers. It meant they did not have to spend time working out things like how many deliveries they had made, and at what rate.  Nonetheless in the Judge's view “It was a payslip in all but name”.  She commented "This is a long way from an arrangement whereby a contractor, such as a window cleaner, writes and then delivers their bill from which deductions are only made, generally by agreement, if, for example, they have broken a window".

As to whether Ms Dewhurst was totally “independent”, which would have indicated she was self-employed rather than being a “worker”, the Judge noted:

Ms Dewhurst was also proud of her professionalism but did describe one incident when she was feeling unwell at the end of the day and asked the controller if she could go home.  She was told that he could not find somebody else for a job and so she could not go”.  And EJ Wade caustically adds “The respondent did not provide the evidence to rebut this…”.

The Judge’s conclusion

EJ Wade noted CitySprint’s opening outline which said "(CitySprint) operates courier services around the UK.  Self-employed van drivers, motorcycle riders and cycle couriers all make their services available to CitySprint, on relatively the same terms”.

By contrast, when questioned, Ms Dewhurst had said:

I work hard for them so that they can maintain their relationship with their clients

The Judge concluded "not only is the phrase "make their services available" as opposed to "work for" a mouthful, it is also window dressing and I find Ms Dewhurst description to be more accurate…".

EJ Wade took a steer from an earlier Supreme Court case involving car valeters (Autoclenz Limited v Belcher & Others [2011] IRLR 820) where the suggestion that those individuals were “in business on their own account” pursuant to the contracts that they signed, was roundly rejected.

She quoted a passage from Lady Smith’s judgment in the Court of Appeal (in Autoclenz) where (at paragraph 69) she said:

"It matters not how many times an employer proclaims that he is engaging a man as a self-employed contractor; if he then imposes requirements on that man which are the obligations of an employee and the employee goes along with them, the true nature of the contractual relationship is that of employer and employee.  I can see that the argument of the employee is rather less attractive where, for many years, he accepts that he is a self-employed contractor and benefits from the rather more favourable taxation arrangements, which are available to people running their own businesses.  However, it seems to me that, even where the arrangement has been allowed to continue for many years without question on either side, once the Courts are asked to determine the question of status, they must do so on the basis of the true legal position, regardless of what the parties had been content to accept over the years.  In short I do not think that an employee should be stopped from contending that he is an employee merely because he has been content to accept self-employed status for some years”.

EJ Wade went on to say (at paragraph 60) "In the post-Autoclenz (-) era, I understand the law to be that whilst the express terms of the contract are key pieces in the jigsaw, the bar is low before the true situation can be explored”.

So with apologies for repeating the phrase in this context, there does appear to be a real direction of travel in these cases: 

  1. First Autoclenz (along with another case involving a solicitor “partner” in a law firm, Bates van Winkelhof v Clyde & Co [2014]), is plainly the leading authority and is the case most frequently turned to for guidance in this area;
  2. Accepting, of course, that Uber is being appealed, it has nonetheless pointed the way in terms of these “new way of working” cases;
  3. Leaving aside the issue of Brexit and how it may affect UK employment law, EJ Wade has observed (at paragraph 73 of her judgment) “It seems to me that perhaps influenced by EU law, the emphasis has moved from the requirement forensically to analyse the components of the contract to looking at its main purpose.”
  4. The Prime Minister, having appointed the RSA Chief Executive, Matthew Taylor, specifically to look into and report as to whether employment law is keeping pace with today's working practices, is seemingly sympathetic to the argument that our employment law does now need to adapt to accommodate the way in which many individuals now work or provide their services;
  5. Just last month, on the Andrew Marr programme, Mrs May repeated her commitment to protect workers’ rights, notwithstanding the (not so) latent threat contained in her Lancaster House speech a few days earlier,  when she warned that if our European partners do not play ball when we exit the EU, we may look to become a low regulation / low tax economy.  

Finally, the fact that EJ Wade has drawn the conclusion that in this latest case the claimant was a worker and was entitled to her rights as such, seems to indicate that in today’s environment an employer seeking to litigate such cases in the future will need to exercise great care.  Before doing so, they would be well advised to examine carefully the practical reality of their relationship with those whose services they acquire – rather than relying on the “form” of the document that brings them together.  So, for example, if the contract provides for the right of the individual to call upon another to act as their substitute (usually a sign of a self employment relationship), it might be very helpful if that has actually happened on more than one occasion! 

Whatever the position, the result of any appeal in Uber, is going to be of great importance, as will the outcome of Matthew Taylor's Enquiry.  Only then may we know if we have arrived at our destination!

A shortened version of this blog appeared in People Management on 10 February 2017.

Further information

For further information on the issues raised in this blog, please contact Richard Fox or any member of our employment team.

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