David Walker

After being probably the highest profile aspect of employment law in 2017/18, the profile of cases relating to the employment status of those working in the gig economy has diminished recently. The primary issue in these cases was whether the individuals were genuinely independent contractors, or whether they had been wrongly categorised as such and were in fact workers with the additional rights that brings. The profile of these cases may have been about to increase again given Uber BV and others v Aslam is scheduled to be heard in the Supreme Court on 22 and 23 July following an unsuccessful appeal by Uber to the Court of Appeal. However a reference from a lowly employment tribunal in Watford to the Court of Justice of the European Union (CJEU) has just sneaked in and stolen its thunder. It may also have an influence on the outcome.

A focus of the domestic courts and tribunals when considering these cases has been the issue of substitution - did the individual have an unfettered right to appoint a substitute to carry out their work. Under the Working Time Regulations (WTR), which implement the EU Working Time Directive (WTD), a worker must perform work personally for the employer. The existence of an unfettered right to substitute would therefore prevent an individual from being classified as a worker. The Working Time Directive itself does not define what a worker is but EU case law has provided a definition, a worker being someone who performs services for and under the direction of another person in return for which he receives remuneration. This apparently broader test, with less focus on the issue of substitution, raises the question of whether the approach taken by domestic courts and tribunals is compatible with EU law.

In the case of B v Yodel Delivery Network Limited, B worked for Yodel as a delivery driver. He had a degree of flexibility over his working hours, was free to work for third parties and was also free to sub-contract work or use a substitute, as long as the substitute was suitably qualified to do the work. He brought claims under the WTR, claiming he has the status of a worker. When a preliminary hearing on employment status came before the employment tribunal in Watford a reference was made to the CJEU. The reference sought guidance on whether the focus under domestic law on the right to substitute was incompatible with EU law.

The CJEU considered the matter and handed down a “reasoned order” (so the decision was based on existing case law with no oral or written submission from the parties). It stated that it was for the national court to decide if B was a worker because it requires an assessment of all the circumstances. The classification of an independent contractor under national law does not prevent that person being classified as a worker within the meaning of EU law. In order to give “a useful answer to the referring court” the CJEU made the following points:

• the amount of latitude B had in relation to his employer was important;
• it was necessary to examine whether the apparent independence that latitude gave him was real or merely notional;
• it was additionally necessary to ascertain whether B was in a relationship of subordination with Yodel;
• it was significant that the limitations on B’s right to provide a substitute were very limited, essentially the substitution could be anyone who had basic qualifications and skills for the job equivalent to B’;
• it was of great significance that B had an absolute right to accept or reject tasks assigned to him and that he had the right to provide his services to Yodel’s direct competitors;
• finally, while it was true that B had to provide the services within particular timeslots that simply reflected the inherent nature of Yodel’s business.

Despite having said it was a matter for the national court to decide, the CJEU did go on (unusually) to express a view finding that there did not appear to be a relationship of subordination between B and Yodel. I other words, he would not appear to be a worker. The matter will, however, return to the tribunal in Watford for the final determination.

In terms of any impact on the Supreme Court’s decision in the Uber case, the CJEU relied on pre-existing case law in order to decide this case - case law which has been in place and which should already have been considered (in so far as it was relevant) as the Uber case made its way through the courts and tribunals here. On that basis, we maybe should not expect to see any influence at all. However, this is still a timely reminder that there are differences between domestic courts and tribunals and the EU when it comes to defining a worker, and that, combined with the fact that the Court of Appeal judgement was not unanimous, means we could yet get a surprise when the Uber case gets to the Supreme Court in July.

David Walker is a partner at Morton Fraser