In Leyland and others v Hermes Parcelnet Ltd the Employment Tribunal has found that the parcel delivery couriers were workers rather than self-employed contractors as the result of a “dependant work relationship”. This was in spite of their contracts stating that they were self-employed contractors. This case reinforces the current trend of the courts to examine the reality of the relationship between the parties.
A group of couriers for Hermes Parcelnet Ltd (“Hermes”) brought a claim in the Employment Tribunal (“ET”) for the enforcement of various statutory rights, including National Minimum Wage and annual leave, which Hermes said they were not entitled to on the grounds of their self-employed status. The couriers argued that, in reality, they were required to provide a personal service and that Hermes could not be considered a client or customer of the couriers. The couriers therefore claimed that they were workers and so entitled to workers’ rights. An individual is a worker if they work under a contract whereby they undertake to do or perform personally any work or services for another party to the contract and where that other party is not a client or customer of the individual.
The ET found that, taking into account terms of the contract and looking at all the factors, the way in which the parties operated clearly pointed to the couriers being workers. In particular, with respect to the issue of whether the couriers were required to undertake the work personally, it was found that, although the contracts stated that couriers could use substitutes, this was not an unfettered right and did not reflect the reality of the agreement. Couriers had the right to use a cover, who was also a Hermes courier, or someone of their choosing but Hermes retained the right to refuse that choice of cover or substitute. Also, in the event that a substitute was used, the courier would remain personally liable for the service provided by that substitute. In the circumstances, and based on the fact the couriers were obliged to provide a delivery service on their particular route on every day on which they were contracted to work, the ET found a mutuality of obligation existed and as such the couriers were in fact workers. The ET also took into account the fact that there were not in reality negotiated pay rates, which Hermes had claimed was the case.
The ET also described the arrangement as a dependant work relationship in which the couriers had little autonomy.
These cases are highly fact specific but nonetheless the Hermes case is another example of where the tribunal has found that the individuals engaged on a self-employed basis are in fact workers and are entitled to worker rights. In the majority of these cases a key factor has been whether there is an unfettered right of substitution. If that is not the case, then recent cases suggest that there is a strong chance that the individuals will be found to be workers and entitled to worker rights, including National Minimum or Living Wage, holiday pay and the right to claim discrimination.
Businesses which engage individuals directly other than as employee should seek advice and consider whether there is a risk that such individuals may in fact be workers.