Employment status - Substance over label

1st August 2017

In our last issue of the HR Newsletter, we highlighted some of the key findings of the Taylor Review. What is quite certain is that the debate surrounding employment status will continue to rage on. Whilst employers may look for some further certainty and an appreciation of the principles of commerciality, employees will conversely be looking to establish their rights. These competing interests operate within the overarching principle that the reality of the relationship dictates employment status.

In the recent case of Gascoigne v Addison Lee Ltd, the Employment Tribunal held that a courier of Addison Lee was a worker as opposed to an independent contractor. In Gascoigne, the employee in question was a cyclist engaged by Addison as a courier. The contract labelled the employee as an independent contractor and that the contract could not be interpreted to render the individual an employee, worker, agent or partner of the company. Already, we can begin to discern the concept of a label being applied to a relationship which, as established by case law, will be subject to legal test and analysis based upon a consideration of the reality.

The contract specified that Mr Gascoigne could choose his working days but that there was no obligation on Addison to provide work nor upon Mr Gascoigne to accept such work. The contract also contained a clause in which Mr Gascoigne would be required to indemnify the company against any liability resulting from a claim made by him based upon employment status.

Judge Wade of the Central London Employment Tribunal found that Mr Gascoigne was indeed a worker. The Tribunal referred to the case of Autoclenz v Belcher and reasoned that the content of the contract did not accurately reflect the relationship. Factors that indicated worker status included the following:

  • The claimant was working under a contract that did not reflect the true nature of the working relationship and the claimant had no ability to agree or negotiate it;
  • There were obligations of personal service that pointed towards worker status;
  • The company set the rates of pay;
  • The invoice was in reality a payslip; and
  • Couriers were not marketed by name. The service was provided by the Addison Lee fleet as a whole.

Employer Considerations

The case law surrounding employment status seems to have followed a particular pattern and that is to say, upon an assessment of reality, employment Tribunals tend to be leaning towards worker status. As reported in our previous HR Newsletter, the Taylor review recommends a new category of “dependent contractors”. Whilst it remains to be seen, whether the proposals in the Taylor review will be accepted, it is clear that Tribunals are prepare to disregard false labels that may be used to describe employment status as “self employment”.


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