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Worker Status: the CJEU ruling on B v. Yodel Delivery Network

06.05.20

On 22 April, and following what may be one of the very last UK references to the CJEU, the CJEU issued its response to questions on the correct test for worker status. The case of b v. Yodel was referred to the CJEU by EJ Andrew Clarke sitting at Watford ET.

Facts

B is a parcel delivery courier, working exclusively for Yodel, under a courier services agreement that stipulated that he was a self-employed independent contractor. Couriers use their own vehicle and mobile phone, and do not wear a uniform or have branding on their vehicle. Couriers are provided with a handheld device used for providing instructions and monitoring performance; B received 4 hours training on using this device at the start of his engagement. Couriers are required to have insurance which they could arrange or could opt into Yodel’s group policy for £3 per week; B chose to opt into the group policy. Couriers can appoint a substitute, for whom they remained personally liable. Yodel was entitled to veto the substitution if the substitute does not have an adequate level of skills and qualification. In fact, B had never arranged for a substitute. The courier services agreement also provides that the courier is free to work for other delivery services; B has never provided services to a third party and derives the bulk of his income from Yodel. The agreement further provides that Yodel is under no obligation to provide work; and that couriers are not required to accept any parcel for delivery. Couriers are required to deliver the parcels that they have agreed to deliver between 7.30am and 9pm but within those times are able to plan their own time, practices and route to suit their personal convenience. Couriers are paid a fixed rate for each delivered parcel.

Legal Context

Article 2 of Directive 2003/88 provides: “working time” means any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice.

Directive 2003/88 was transposed into national law by the Working Time Regulations 1998, Regulation 2 of which provides:

‘In these Regulations

… “worker” means an individual who has entered into or works under …:

(a)      a contract of employment; or

(b)      any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly.”

The Reference

The Watford tribunal had asked 8 separate questions which the CJEU determined were to be considered together. It took as the essential question to be whether the Directive must be interpreted as precluding a person from being classified as a worker where that person is afforded the discretion: i. to use substitutes; ii. to accept or decline the various tasks offered by the putative employer; iii. to provide his services to any third party including competitors of the employer; and iv. to fix his own hours of work within certain parameters to suit his own convenience.

The Court’s decision

Instead of giving a judgment, the court decided it was appropriate to make a reasoned order under Article 99 of its Rules of Procedure. A. 99 can be used where either the question referred may be clearly deduced from existing case law or admits of no reasonable doubt.

The court noted as a preliminary point that the Directive does not define the concept of “worker”. However, the court has already ruled that it is for national courts to apply that concept of a worker. In determining to what extent a person carries on activities under the direction of another, the national court must base that on objective criteria and make an overall assessment of all the circumstances of the case having regard both to the nature of the activities concerned and the relationship of the parties.  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.

A person could still be classified as a worker under EU law where their independence was “merely notional”. On the other hand, more in terms of type of work to be done and the manner, time and place of work, and more freedom in recruiting substitutes, are features typically associated with an independent service provider. In relation to substitution, it was uncontroversial that the putative employer can exercise only limited control over the substitute, on the basis of a purely objective criterion and without giving any personal preference. In other words, any greater control would mean that the right to substitute is no longer genuinely unfettered.

In the present case, the CJEU noted that B enjoyed “a great deal of latitude” in relation to the putative employer. The independence of the courier did not appear to be fictitious and there did not appear to be a relationship of subordination between him and his putative employer. While the final decision on the case was for the referring tribunal, in replying to the essential question referred to it, the CJEU’s answer was clear: a contractor afforded the discretions noted above is not to be classified as a worker for the purposes of the Directive.

Conclusion

The CJEU did not answer the deeper question of whether the personal service test is consistent with the touchstone of EU law, namely 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. The tribunal had in mind, when referring this question to the CJEU, the position where there is an unfettered right to substitution that is in practice never exercised. The domestic position is that a genuine right of substitution is fatal to worker status, and it is irrelevant if the right is not in fact used; Express & Echo v. Tanton [1999] ICR 693.

The question of whether or not this is compatible with the Directive thus remains at large. The decision of the CJEU indicates that it is likely to be a question of fact and degree, with the key indicators being the genuine independence of the individual and the absence of a relationship of subordination.

Lucy Bone

 

 

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