Employment Law Cases

Stuart Delivery Ltd v Augustine

A delivery courier was a ‘worker’ despite his agreement containing what purported to be a substitution clause.

Section 230 of the Employment Rights Act 1996 defines a ‘worker’ as someone working under a contract for service (an employment contract) or someone who personally performs work or services other than when the status of the other party is one of client or customer.

A key requirement here is to carry out work ‘personally’; someone who’s genuinely free to provide a replacement to do their work will be self-employed rather than a ‘worker’ (or employee). A right under a contractual agreement to substitute another person to do the work (as long as it’s genuine and is what happens in reality) will negate any obligation to perform work personally.

Background

Stuart Delivery (SD) is a delivery company which uses an app to pair its fleet of couriers with deliveries to clients. Mr Augustine signed up as a courier. He undertook fixed slot deliveries, i.e. he committed in advance to being available in a certain geographic zone for a specific time. Couriers had to stay in their zone for the period of the slot to which they signed up. To incentivise sign ups to the slots, SD guaranteed £9 per hour during such slots, irrespective of the number of deliveries. However, that monetary guarantee fell away if a courier logged off the app for more than six minutes or declined more than one job. Once a slot was accepted, if a courier wanted to back out, he had to send a release notification, which made it available to other couriers via the app. That was the way to ‘substitute’. Couriers had no control over and no knowledge of who then took over the slot. If no-one took over the slot, the courier had to fulfil it or suffer the consequences of failing to do so (there was no opportunity to get a third party in as a substitute). The potential sanctions included ineligibility for bonuses, downgrading of performance scores and being suspending from being able to access the app.

Mr Augustine brought tribunal claims for, among other things, unauthorised deductions and holiday pay. The tribunal had to consider his employment status while he was undertaking slot deliveries. Did he have to perform work personally (so as to qualify as a ‘worker’) or did his ability to release a slot via the app detract from any obligation of personal performance? The tribunal held that he was a ‘worker’ – the release procedure did not qualify as an unfettered right of substitution which would have undermined the obligation of personal performance. SD appealed.

The EAT dismissed the appeal. The release process wasn’t a substitution clause but rather was a mechanism whereby SD hoped that another courier would take up any released slot. SD had an absolute and unfettered right to withhold consent since only the couriers it accepted into its pool could use the app to sign up for slots which another courier wanted to relinquish. Mr Augustine had no control whatsoever over who, if anyone, would accept the slot he’d signed up for and no longer wished to work. It did not therefore amount to a right of substitution negating the element of personal performance. SD appealed, arguing that the tribunal and EAT had misunderstood earlier case law on the right of substitution..

Court of Appeal decision

The appeal was dismissed. Essentially the Court of Appeal endorsed the approach taken by the tribunal. It considered that the system set up by SD was intended to ensure that Mr Augustine did carry out the work and, in particular, that he did turn up for the slots that he had signed up for and do the delivery work during those slots. That was necessary for SD’s business model to work. As the tribunal said, the limited right or ability of Mr Augustine to notify other couriers via the app that he wished to release that slot for take up by other couriers ‘was not, in reality, sufficient right of substitution to remove from him that personal obligation to perform his work personally for the [SD]’. Such a conclusion was also, said the Court of Appeal, wholly consistent with the decision of the Supreme Court in Pimlico Plumbers that the ability to appoint a substitute subject to a significant limitation (namely that the substitute was also a Pimlico operative) didn’t negate personal performance.

Link to judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2021/1514.html

Comment

Any substitution clause will be carefully scrutinised by an employment tribunal to see what actually happens in practice. If Mr Augustine had had the job of finding someone else to do his assigned work then the outcome may have been different.

As the Court of Appeal observed, the examples given in earlier case law of what types of rights of substitution may or may not negative an obligation to provide service personally are just that, examples - they do not set down rigid classifications that are binding on other courts. The real question to be addressed in every case is whether the nature and degree of any fetter on the right or ability to appoint a substitute is inconsistent with an obligation of personal performance.