Back in November 2023, the Supreme Court held that Deliveroo riders do not have the right to be part of a trade union (under Article 11 of the European Convention on Human Rights) because the riders are not in an employment relationship (neither employees or workers) with Deliveroo (Independent Workers Union of Great Britain (IWGB) v Central Arbitration Committee & another (CAC) 2023.
This decision matters because it reinforces the importance of personal service (where the individual is required to perform the work personally) and the right of substitution (being permitted to send someone else to do the work in their place) when looking to determine an individual’s employment status.
In its landmark ruling in Uber V Aslam back in February 2021, the Supreme Court found that a company’s actual level of control, not what is expressed in the contract, ultimately determines the employment status of its workers. The Supreme Court took the view that, when considering cases involving employment legislation designed to protect vulnerable workers, the starting points is not the contract itself: courts should look beyond the stated terms in the contract and focus first on whats happening on the ground, the every day reality of the work.
In Bandi & Others v Bolt 2024 in November 2024, an Employment Tribunal ruled that drivers with the ride-hailing app Bolt are classified as ‘workers, granting them rights to paid holidays and the minimum wage. A key factor in the Tribunal’s decision was the level of control Bolt exercised over its drivers. The Tribunal concluded that Bolt maintained significant control over how, when, and where its drivers operated—another critical element in determining employment status.
Bolt argued that its “Bolt-Link” scheme, which allowed drivers to authorise others to work under their account, negated the requirement for personal service. However, the Tribunal dismissed this claim, finding that drivers were still contracted to provide services personally to Bolt, meaning they could not delegate their work to substitutes in any meaningful way.
Implications for employers following the latest gig economy cases.
Employers need to reconsider carefully whether freelancers and contractors are genuinely self employed, or merely disguised workers, in the light of Uber’s landmark ruling and continuing case law.
You will need to update employment contracts if they include terms which, in practice, do not reflect what is happening ‘on the ground’, and/or which seek to deny workers their basic statutory rights, for example National Minimum Wages, holiday pay and pension.
Likewise, the courts will not be swayed by efforts to circumvent the personal service
Uber responded to the judgment in 2021 by saying that all their drivers will be workers, with entitlement to minimum wage, holiday pay, sick pay and pensions.
In the Bolt case, litigation will continue in the Employment Tribunal to address the drivers’ claims for holiday pay and minimum wage entitlements. In both cases, these bills will be large.
Finally before winning the election in July 2024, the Labour Party signalled its intention to reform the current three-tier system of employment status (Employee, Worker, Self Employed) by simplifying it into a two-tier framework, removing the distinction between employees and workers. This proposal was not included in the Employment Rights Bill published in October 2024, the Government consigning it perhaps for now in the “too hard basket”. It still plans to hold a consultation on the matter at some point.
If you need advice on auditing and assessing the employment status of freelancers and contractors in your business, please get in touch. Details are below.
