Augustine Clement

  • Employment Status
  • Right of Substitution
  • Who is a worker?

The Court of Appeal in Stuart Delivery Limited -v- Augustine (2021) EWCA Civ 1514 reaffirms its position in earlier cases that a limited right of substitution is not inconsistent with the duty to personal services personally, in upholding an employment tribunal’s decision that a courier driver who could release a delivery slot that he had agreed to undertake to another courier worked under a contract for the personal performance of services, still satisfies the definition of ‘worker’ under S.230(3)(b) of the Employment Rights Act 1996.

SD Ltd developed a technology platform connecting couriers with clients via a mobile app. Couriers can opt to undertake ‘ad hoc’ or ‘slot’ deliveries, the latter requiring them to commit to being available in a certain place at a certain time, to fulfil their obligations under the contract. A courier may release a ‘slot’, making it available to other couriers, but if no one accepts, then the original courier remains liable for completing it. When the Claimant sought to bring various claims against SD Ltd, the employment tribunal had to consider whether he was under an obligation to perform services personally, as required for ‘worker’ status under S.230(3)(b) ERA.

The tribunal found that the release procedure did not amount to an unfettered right of substitution, since the Claimant would only be released from his obligation to undertake the slot if another courier signed up, and he had no control over whether this happened. In its view, this was in the fifth category of substitution identified by the Court of Appeal in Pimlico Plumbers Ltd and anor v Smith, (2017) EWCA Civ 51 i.e., ‘a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent’, which is consistent with personal performance. The tribunal went on to hold that SD Ltd was not a client of any business run by the Claimant. On appeal, the EAT agreed with the tribunal’s analysis. SD Ltd appealed to the Court of Appeal on the question of A’s right of substitution.

In dismissing the appeal, the Court of Appeal confirmed that the issue for a tribunal is whether a claimant is under an obligation personally to perform the work or provide the services and held that the tribunal was entitled to find that the Claimant was a worker within the meaning of S.230(3)(b) ERA. The Court noted that the system set up by SD Ltd was intended to ensure that the Claimant did carry out the work and, in particular, that he did turn up for the slots that he had signed up for and do the delivery work during those slots personally. That was necessary for SD Ltd’s business model to work. The court observed that the limited right or ability of the Claimant to notify other couriers via the app that he wished to release that slot for take up by other couriers was not, in reality, a sufficient right of substitution to remove from him that obligation to perform his work personally.

This conclusion is consistent with all the recent decisions on the gig economy model and consistent with the proposition that a limited right of substitution does not by itself negate the duty to perform services personally, which is one of the criteria in play in determining status.