Employee, worker or self-employed?

Self Employed

It would seem that the controversy over employment status which resulted in so much bad publicity for Sports Direct, and which then put Uber and Deliveroo under the spotlight, is continuing to rumble.

Last month saw two new reported cases – Dhillon and Dhillon v HMRC and Dewhurst v CitySprint UK Ltd.2- Feb)

The first case was brought under tax legislation (which, unlike employment legislation, does not recognise “worker” status). It concerned a group of lorry drivers. The drivers could turn down work, there were no guarantees of work, and they had a limited right of substitution. They received induction training, but then were largely unsupervised (although they had to meet competency and safety standards). They drove lorries belonging to Dhillon and Dhillon and they were paid a fixed amount per shift. The First-Tier Tax Tribunal found that the drivers were employees during each individual contract (so what we may have traditionally have referred to as “casual” or “bank” employees). The tribunal found that the employer had a considerable degree of control over the drivers when they were working, and the drivers were not in business on their own account. As they were employees during the periods they worked, their earnings were subject to tax and NI deductions.

The second case – Dewhurst v CitySprint UK Limited – concerns a cycle courier, who CitySprint described as self-employed. Her services agreement specified clearly that there was no obligation on CitySprint to provide work and also no obligation on her to accept work. Any periods spent not working were unpaid, and there was no paid holiday, maternity or sick pay. However, in reality, Ms Dewhurst worked regular hours – normally four days a week, between 9.30am and 6.30pm. Each morning she spoke to a controller and then logged into an online tracking system which determined her deliveries, and which tracked her movements. She was given equipment and a uniform. CitySprint automatically calculated her payments, and paid her in arrears each Friday. The employment tribunal decided that the service agreement did not reflect the true nature of the working relationship and that Ms Dewhurst was a worker, and therefore entitled to receive holiday pay.

All of these cases emphasise two things – the need to determine the nature of the working relationship correctly in the first place, and the fact that tribunals will look beyond the documentation to see whether what happens in practice is consistent with this.

For more advice on employment status, do talk to our advisors.

 

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