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Employment Law Cases
Worker status under the Working Time Directive
B v Yodel Delivery Network Ltd
The ECJ has held that a courier appeared to have been correctly classified as self- employed rather than as a worker, given his independence and the lack of subordination.
B worked as a courier for Yodel, a parcel delivery company. The agreement stipulated that couriers were ‘self-employed independent contractors’. The couriers use their vehicle to deliver parcels and their mobile phones to communicate with Yodel. They are not required to perform the delivery personally but may appoint a substitute for the whole or part of the service provided, although Yodel can veto the substitution if the substitute does not have an adequate level of skills and qualification. In any event, the courier remains personally liable for any acts or omissions of any substitute. Couriers are also free to deliver parcels for other companies as well as providing services to Yodel. Couriers are not required to accept any parcel for delivery and can fix a maximum number of deliveries. A fixed rate for remuneration is set for each parcel by Yodel. In any event, the courier remains personally liable for any acts or omissions of any substitute.
When B sought to bring claims under the Working Time Regulations 1998 (WTR), the question arose whether he was a ‘worker’ for the purposes of the WTR and the Working Time Directive (WTD). The Watford Employment Tribunal observed that the WTR define a worker as someone who undertakes to do or perform work personally yet the Yodel couriers were not in fact required to deliver all the parcels personally because they had the right to ask someone else to do the deliveries for them. The tribunal asked the ECJ for a ruling on whether the WTR personal service requirement was compatible with the requirements of the directive.
Instead of giving a judgment, the ECJ decided to make a ‘reasoned order’ which can be made (under its rules of procedure) where, among other things, the answer to a question referred may be clearly deduced from existing case law or where there is no reasonable doubt.
ECJ reasoned order
Although the WTD does not define ‘worker’, the concept has a meaning specific to EU law. Firstly, the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration. Secondly, the classification of an ‘independent contractor’ under national law does not prevent that person being classified as an employee, within the meaning of EU law, if his independence is merely notional, thereby disguising an employment relationship.
In contrast, the WTD does not cover independent contractors who are afforded the discretion to:
- provide substitutes
- choose whether or not to accept tasks or unilaterally set the maximum number of those tasks
- provide services to any third party, including direct competitors, and
- fix their own working hours within certain parameters and tailor their time to suit their personal convenience rather than solely the interests of the putative employer
This is subject to two important caveats: the independence of the contractor must not appear to be fictitious and it is not possible to establish the existence of a relationship of subordination between that person and the ‘employer’.
On the facts of this case, the ECJ, ‘in order to give a useful answer to the referring court’, made the following observations:
- 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 also 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 few, essentially the substitution could be anyone who had basic qualifications and skills for the job equivalent to B’s
- it was of 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, and
- while it was true that B had to provide the services within particular timeslots that simply reflected the inherent nature of Yodel’s business
Whilst recognising that the final outcome of the case is a matter for the UK tribunal, the ECJ did in fact (and unusually) express a firm view:
‘In the light of all those factors, first, the independence of a courier, such as [B], does not appear to be fictitious and, second, there does not appear … to be a relationship of subordination between him and his putative employer’.
Link to ECJ Order: https://www.bailii.org/eu/cases/EUECJ/2020/C69219.html
Where does this leave us as regards employment status cases in the UK, of which there have been a fair few in recent years, typically (but not always) being decided in favour of the gig worker arguing that he or she is not self-employed but rather a ‘worker’? But is this ECJ ‘decision’ as employer friendly as it first appears? For the following reasons, it should be treated with caution:
- It is a reasoned order and not a judgment, so arguably limited in precedential value. With a typical ECJ case there would first have been an Opinion from the Advocate-General followed by a judgment from the full court (with the parties able to make oral/written submissions).
- It turns on a very specific set of facts and the ECJ’s analysis seems focused on the contractual terms rather than socio-economic realities.