‘Worker’ Status and the Right of Substitution

By Rachel Davis

Principal Associate

The Court of Appeal has upheld an employment tribunal’s decision that a courier driver was a ‘limb (b) worker’ despite a purported ‘right of substitution’.

Section 230(3) of the Employment Rights Act 1996 defines a ‘worker’ as someone working under (a) a contract for service (employment contract) or (b) any other contract whereby the individual personally performs work or services. Individuals who are not employees, but satisfy the requirements at (b), are sometimes referred to as “limb (b) workers”.  A key requirement is that the worker carries out work ‘personally’ and is therefore not free to ask someone else to do the work in their place. If there is a genuine right under a contractual agreement to substitute another person to do the work (know as a ‘substitution clause’), this will negate any obligation to perform work personally and will mean the individual is self-employed, rather than a ‘worker’ or an employee.

Workers are entitled to certain employment rights, including getting the national minimum wage, protection against unlawful deduction from wages, and statutory minimum holiday and rest breaks, whereas self-employed contractors have very limited rights.

Stuart Delivery Ltd v Augustine

Stuart Delivery Ltd (SD) is a delivery company which uses a technology platform to connect couriers with clients via a mobile app.  Couriers are required to accept fixed slot deliveries and commit in advance to being available in a certain place at a certain time. To incentivise couriers to sign up to this commitment, SD pay  £9 per hour, irrespective of the number of deliveries. A courier may release a ‘slot’, making it available for other couriers but, if no-one accepts, the original courier remains liable for completing it. The potential sanctions for failing to fulfil the commitment, if no-one else takes over, includes ineligibility for bonuses, downgrading of performance scores and being suspended from being able to access the app.

When Mr Augustine (Mr A) sought to bring various claims against SD,  the employment tribunal had to consider whether he was under an obligation to perform services personally, as required for ‘worker’ status. The tribunal found that the release procedure did not amount to an unfettered right of substitution, since Mr A would only be released from his obligation to undertake the slot if another courier signed up, and Mr A had no control over whether or not this happened. The tribunal therefore found Mr A to be a ‘limb (b) worker’.

SD appealed but The Court of Appeal endorsed the approach taken by the tribunal and considered that the system set up by SD was intended to ensure that couriers did carry out the work and turn up for slots that they had signed up for and do the delivery work during those slots. The limited right of Mr A to notify other couriers via the app that he wished to release that slot, was not, in reality, sufficient right of substitution to remove the courier from the obligation to perform work personally.   

This decision is wholly consistent with the decision of the Supreme Court in Pimlico Plumbers that the ability to appoint a substitute subject to a significant limitation, did not negate personal performance, and Mr A’s employment status was therefore that of ‘worker’.

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