The advantage of a more flexible workforce in the hospitality industry is clear. It means businesses can meet supply and demand better, switching the flow of workers on and off to ensure service levels remain high at busy times.

Increasingly businesses are using flexible contractors rather than full time employees. These staff work flexible shifts, in temporary roles, with no minimum hours and are engaged on the basis that they are self-employed.  This is a new way to earn money working on demand and a new flexible way for employers to manage variations in staffing requirements.  This is often referred to as the “gig” economy.  However, over the last few years there have been various cases which have challenged the notion that these contractors are genuinely self-employed.  The Court of Appeal decided that Uber drivers were workers and the EAT decided that Addison Lee drivers were workers too.  In a decision going the other way the Central Arbitration Committee decided that Deliveroo riders were not workers. Now the UK has asked the EU for its view.

In the latest development the Watford ET has referred the case of a Yodel driver to the CJEU (formerly the ECJ) asking whether the fact that his contract expressly gives him a right to provide a substitute to perform all or part of his work means that he cannot be a “worker” under the Working Time Regulations.  As a matter of fact the individual in question uses his own vehicle and phone, he does not wear uniform or have branding on his van.  He does not carry identification from Yodel but does use their handheld scanner.  The driver argues that he has never provided a substitute to cover his work and should be categorised as a worker.  The ET has asked whether, because under UK law an obligation to provide personal service is required for someone to be categorised as a worker, UK legislation is incompatible with EU law.  In short the ET is asking is a contractual right to provide a substitute fatal to worker status?

Why is a worker’s status so important?

Employment status determines which legal rights a person is entitled to.  Employees have the greatest rights – not to be unfairly dismissed, to receive holiday and sick pay. Some legislation extends protection to workers as well as employees – for example, workers are entitled to rest breaks and paid holiday under the Working Time Regulations, as well as the national minimum wage and protection from discrimination and victimisation.  They are also entitled to a contribution from their employer under an auto enrolment pension scheme.  Self employed contractors do not benefit from such rights and protections.

The Good Work Plan

Following the Taylor review the Government announced that it would legislate to make the tests for employment status clearer, placing more emphasis on the control test and less on the right of substitution.  The Government intends to create an online tool to help determine employment status.  It remains the case that there is still no draft legislation or a proposed timetable for introduction of new legislation.  For the time being this area of the law is in a state of flux and employers who have questions about the status of their workers should seek specific legal advice.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.