27 March 2017
In a further indictment of the gig economy, another tribunal has ruled that a person classified as “self employed” is in fact a “worker”.
Excel Group Services Ltd, which is currently in liquidation, was wrong to label its cycle courier Andrew Boxer as a contractor, Central London Employment Tribunal found last week.
Mr Boxer’s claim was for one week’s holiday pay, after he took a period of annual leave and was not paid for it. Entitlement to holiday pay is one of the rights “workers” have that “self employed” contractors do not.
Although Mr Boxer’s contract stated it was a non-exclusive agreement, allowing him to supply his services to others companies too, the tribunal found that “this was not the reality and indeed the business could not have managed with couriers who were this semi-detached”.
The tribunal further found that Mr Boxer had no ability to negotiate his tariff or terms of his contract – as a self-employed person would – and he is not responsible for recording or justifying the hours he has worked. He does not invoice for his hours worked but is provided with a “driver memo” that tells him what he will be paid, and includes the statement “(not an invoice)”.
“It is correct that it is not an invoice because it is in reality a payslip,” the tribunal pointed out.
In other ways, the relationship between Excel and Mr Boxer mirrored that of the relationship between employer and worker rather than a business-to-business deal. Mr Boxer was expected to be available throughout the working day; usually worked nine hours a day, five days a week; was obliged to carry his Excel ID at all times; and Excel provided his radio and palm computer.
Although his hours were not technically fixed, Mr Boxer felt he could not turn work down without losing out on future work, and he was expected to “be available” in order to fulfil jobs and let Excel know in advance if he wouldn’t be available.
This is the latest in a series of tribunals which have uncovered a trend for employers to misclassify workers as “self employed” in order to avoid providing workers’ rights, such as minimum wage, holiday pay, sick pay and rest breaks.
Matthew Taylor, chair of the government’s review into the gig economy and employment rights, has also revealed he will include in his final report (due in June) that some employers are deliberately misclassifying workers and employees as “self employed” in order to avoid both tax and their responsibilities to their staff.
The Institute of Employment Rights calls for a universal definition of “worker” to provide anyone in employment (who is not self employed) with the full suite of rights from day one; as well as the establishment of a Labour Inspectorate to ensure that employment law is being followed by employers.
These proposals, which are included within our Manifesto for Labour Law – 25 recommendations for the reform of employment law, the principles of which have been adopted by the Labour Party, are part of an overarching plan to shift the focus of labour law.
At the moment, the onus is on workers to enforce their own rights (by taking them to tribunal, although with fees of up to £1,250 to bring a claim, there are significant barriers to doing so). The Institute of Employment Rights argues that workers are already in a vulnerable position in comparison with employers – who hold all the power in an employment relationship and who have more resources and legal support than workers. Thus, the onus should be on employers to ensure they are following the law, rather than on workers to police the workplace. The establishment of a Labour Inspectorate would therefore make for more effective enforcement. Meanwhile, the promotion of collective bargaining would help to address the imbalance of power between workers and employers, protecting workers from exploitation and helping to reduce the UK’s ever-widening inequality gap.