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12th December 2019

The Gig Economy: Is there really an unfettered right to appoint a substitute?

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The so-called “gig economy” has rarely been out of the news over the past few years as a result of various high profile cases involving, for example, Uber and Deliveroo. The essence of these cases is whether those who carry out the work are classified for employment law purposes as employees, workers or self-employed.

The distinction is very important, as those who are employees have full (well, full to the extent as the law provides) employment rights and protections, whereas at the other end of the scale those who are genuinely self-employed have very little protection of any significance.

The cases, however, have tended to surround whether the Uber drivers, Deliveroo delivery people and so on are “workers” – a category which falls somewhere in between employees and those who are self-employed.

The cases are important as, although workers have significantly less rights and protection compared with employees, they nevertheless have some rights, such as:

  • The right to be paid the national minimum wage.
  • The right to be paid annual leave.
  • The right to pension contributions from the “employer” under the pension auto-enrollment scheme.
  • The right to rest breaks and not to work in excess of the maximum working week under Working Time laws.
  • Protection for being a “whistle-blower”.
One major factor in deciding whether someone is a worker is whether the individual carrying out the work must do so personally, or whether they can, if they wish, arrange for someone else to do the work they have otherwise agreed to do. In other words, whether the individual has the unfettered right to appoint a substitute to do the work.

If they can appoint a substitute whenever they wish, they are not a worker but instead likely to be self-employed with very few meaningful rights.

If however they do not have an unfettered right to do so, they are then likely to be a worker (perhaps even an employee), resulting in them having the rights and protections listed above.

This has led to all sorts of creative ways to try to convince tribunals that the individual can pass the work over to whomsoever they wish, and are therefore not a worker.

The tribunals, however, are alive to this as demonstrated by a case just reported called Stuart Delivery Ltd v Augustine.

In this case, Mr Augustine is a courier who, when he signs up for a particular delivery slot, would be guaranteed a minimum hourly rate for that slot, regardless of the number of deliveries carried out. He does however have to be in the relevant area for the vast majority of the time and refuse no more than one delivery offered to him. Mr Augustine can also subsequently cancel by sending a notification, the result of which makes the slot available for other couriers to take. If however no other courier takes on the slot, Mr Augustine still has to complete it himself, failing to which he faces sanctions.

The delivery company claimed that this ability to send a notification meant that Mr Augustine was not a worker, as he has the power to pass on a delivery slot by appointing a substitute.

The Employment Appeal Tribunal however said that Mr Augustine was a worker. It said there was in fact no right to appoint a substitute, but instead simply a right to hope that another courier would pick up the work, the identity over whom Mr Augustine had no control, and if no-one else picked up that work he still had to carry out the work in the slot.

Although there appeared on the face of it that Mr Augustine could appoint someone else to do the work he’d otherwise agreed to carry out, when looking deeper into the reality of what happens in practice the Employment Appeal Tribunal found that this was not the case and that he is a worker with all the accompanying rights and protections.

The cases on this area are increasingly clear; if a business which claims that the individual is not a worker wishes to rely on the individual’s right to appoint a substitute to carry out the work to back up that claim, that right must be unfettered, and so completely free of any ifs, buts and any other conditions.


For more information on this or any other employment law and practice matters, please contact Nick Hall on 01604 463375 or click here to email.