A recent case helps clarify when an individual is an employee, a worker or self-employed

The recent cycle courier case of Dewhurst v CitySprint UK Limited is not strictly speaking an authoritative judgment. It does, however, evidence an important direction of travel – so to speak – as it follows the well-publicised judgment in the Uber case last October.

Margaret Dewhurst is a cycle courier. She brought a claim to the employment tribunal on the basis that she was not self-employed, but was a ‘limb (b) worker’ pursuant to section 230(3)(b) of the Employment Rights Act. If she had rights as a ‘worker’, she would be able to claim two days’ holiday pay, which she had taken, but for which she was not paid.

Two of the important issues for the judge (EJ Wade) to decide were:

  1. Whatever it might say in the contract (which pointed towards Dewhurst being self-employed), what was the true agreement between the parties?

  1. Was Dewhurst a ‘limb (b) worker’ under the ‘true’ agreement between the parties, and was she therefore entitled to holiday pay?

The issue is important, particularly as we are now seeing new ways of working. Many more contracts with individuals are structured to make them look like a business/self-employed relationship where many feel ‘workers' rights’ are being deliberately, or at least as a consequence, side-stepped. This is an area of real focus at present with Matthew Taylor’s review (commissioned by the prime minister) into whether employment law is keeping pace with modern day workplaces, due to be published in the summer.

The judge’s conclusion

The judge concluded that Dewhurst was indeed a worker, and as such that she was entitled to holiday pay.

In so doing, she quoted from Lady Smith’s judgment in the Court of Appeal in the leading case of Autoclenz – a case about whether car valeters were employees despite what it said in their contracts. In that case she had said: “It matters not how many times an employer proclaims that he is engaging a man as a self-employed contractor; if he then imposes requirements on that man which are the obligations of an employee and the employee goes along with them, the true nature of the contractual relationship is that of employer and employee.”

EJ Wade went on to say: “In the post-Autoclenz era, I understand the law to be that, while the express terms of the contract are key pieces in the jigsaw, the bar is low before the true situation can be explored.”

Accepting, of course, that Uber is being appealed, that case, and now Dewhurst, has nonetheless pointed the way in terms of these ‘new way of working’ cases.

Advice for employers

In today’s environment, an employer seeking to litigate cases such as Dewhurst will need to exercise great care. Before doing so, they should examine carefully the practical reality of their relationship with those whose services they acquire, rather than relying on the ‘form’ of the document that brings them together.

So, for example, if the contract provides for the right of the individual to call upon another to act as their substitute (which would indicate a self-employment business relationship, rather than a contract of employment or a ‘worker’ contract’) it might be helpful if that has actually happened on more than an isolated occasion.

Richard Fox is head of employment law at Kingsley Napley