Employment Team E-Bulletin: May 2020

Is it ok to drink red wine with fish? ... and other important questions

B v Yodel Delivery Network Ltd C-692/19

You know, it’s during times of enforced isolation that you are granted an opportunity to reflect on some of life’s most pressing questions: ‘Is it ok to drink red wine with fish?’, for instance, ‘Did the final season of Game of Thrones ruin the entire series?’, ‘Is the referee a worker?’ (as chanted by many on the terraces and answered in Simon Emslie’s recent article) ‘Is there a name for that bit of your arm on the opposite side of your elbow?’ (email if you know) and of course the question that vexes many of my close friends and neighbours: ‘What is the employment status of that Yodel driver for the purposes of calculating working time?

Fortuitously, this very question was asked by the Watford Employment Tribunal who requested a preliminary ruling on this particular point on 18 September 2019. In consequence the CJEU took, perhaps the unusual step, of providing a ‘reasoned order’ pursuant to Article 99 of the Rules of Procedure and delivered its decision on 22 April 2020 in the case of B v Yodel Delivery Network Ltd.

For those of you who are not au fait with the Rules of Procedure (and if that’s the case, what have you been doing with your time recently), Art. 99 provides:

‘Article 99 Reply by reasoned order

Where a question referred to the Court for a preliminary ruling is identical to a question on which the Court has already ruled, where the reply to such a question may be clearly deduced from existing case-law or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt, the Court may at any time, on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide to rule by reasoned order.’

Clearly the CJEU felt that this was something that Watford ET could deduce for themselves. So, what was asked and what, if anything, can be gleaned from this ruling?

Background

B was employed as a delivery driver carrying on his duties exclusively for Yodel Delivery Network Limited and had been since July 2017. The terms of his contract with Yodel, and the basis under which he was engaged by them, stipulated that he was a ‘self-employed contractor’.

Mr B used his own vehicle to deliver the parcels and his own mobile phone to communicate with Yodel. Mr B could utilise a subcontractor or substitute (subject to a power of veto) in the provision of the delivery service, but remained personally liable for any acts or omissions on the part of that subcontractor or substitute. Under the terms of the contract Mr B was not precluded from running a concurrent service for other delivery organisations.

Additionally, there was no exclusivity or mutual obligation on the part of Mr B or Yodel. Yodel did not have to use Mr B and Mr B did not have to accept any parcels for delivery if he so wished. The only stipulation where a driver was used by Yodel was that parcels had to be delivered between the times of 07:30 and 21:00 Monday to Saturday. The driver could determine routes, order and time slots (subject to any ‘fixed-time’ deliveries).

Mr B claimed that although classified by Yodel as a ‘self-employed independent contractor’ he was in fact an ‘employee’ of Yodel, despite accepting that he was self-employed for tax purposes and accounted for his own business expenses.

In referring the matter to the CJEU, Watford ET noted that:

  1. Because Yodel workers could sub-contract their work, this precluded them from being classified as ‘workers’ under UK law; and
  2. The absence of exclusivity between Yodel and its drivers meant that they must be classified as ‘self-employed independent contractors’.

The Ruling

The proceedings at Watford ET were stayed whilst a preliminary ruling was sought on a number of questions around the compatibility of UK law with Directive [2003/88] and which are set out at paragraph 20 of the judgment. For the purposes of brevity, the questions, in essence, sought to establish whether Directive 2003/88 must be interpreted as precluding a person from being described as a ‘worker’ where they are engaged by a putative employer under the terms of a service agreement in which that person is described as being a self-employed independent contractor. Additionally, was it material to the determination of worker status that a person is afforded a discretion to:

  1. Use sub-contractors or substitutes to perform the service that they have undertaken to provide;
  2. To accept or not accept the various tasks offered by the putative employer or to otherwise determine the maximum number of tasks they will undertake;
  3. To be able to provide their services to any third-party including competitors of the putative employer; and
  4. To fix their own hours of working albeit that this may be confined within certain parameters and to “tailor his time to suit his personal convenience rather than solely the interests of the putative employer”.

The CJEU made a number of initial observations to assist the Watford ET (see paras: 27 – 33). Essentially, the CJEU observed that it was ‘…for the national court to determine to what extent a person carries on his activities under the direction of another…taking account of the circumstances at issue in the main proceedings…’ and that this determination should be based on ‘…objective criteria…’.  Furthermore, that the existence of the relationship between worker and employer must, ‘…in each particular case, be assessed on the basis of all the factors and circumstances characterising the relationship between the parties…’.

As it related to the specifics of Mr B’s situation, however, (perhaps unusually given that the case before the Watford ET had been stayed) it did offer its view considering that the ‘…independence of the courier…does not appear to be fictitious…’ and further that, ‘…there does not appear to be, a priori, to be a relationship of subordination between him and his putative employer.’

More specifically, and as it related to the questions actually asked by the Watford ET in relation to the interpretation of Directive 2003/88, the CJEU ruled at paragraph 45 that:

‘Directive 2003/88 must be interpreted as precluding a person engaged by his putative employer under a services agreement which stipulates that he is a self-employed independent contractor from being classified as a ‘worker’ for the purposes of that directive, where that person is afforded discretion:

–        to use subcontractors or substitutes to perform the service which he has undertaken to provide;

–        to accept or not accept the various tasks offered by his putative employer, or unilaterally set the maximum number of those tasks;

–        to provide his services to any third party, including direct competitors of the putative employer, and

–        to fix his own hours of ‘work’ within certain parameters and to tailor his time to suit his personal convenience rather than solely the interests of the putative employer,

provided that, first, the independence of that person does not appear to be fictitious and, second, it is not possible to establish the existence of a relationship of subordination between that person and his putative employer. However, it is for the referring court, taking account of all the relevant factors relating to that person and to the economic activity he carries on, to classify that person’s professional status under Directive 2003/88.’

None of the above, by estimation at least, really extends the considerations undertaken by an employment tribunal following the cases of: Firthglow Ltd (t/a Protectacoat) v Szilagyi [2009] EWCA Civ 98, Consistent Group Ltd v Kalwak [2007] IRLR 560 and culminating in Autoclenz Ltd v Belcher & Ors [2011] UKSC 41 or that of Ready Mixed Concrete (South East) Limited v the Minister of Pensions and National Insurance [1968] 2 QB 497. Essentially it is what actually takes place taking into account all relevant evidence (the ‘true agreement’) as opposed to what may be written on paper that will determine the status of the individual.

It’s noted that the reasoned judgment provided by the CJEU seems to be focussed on the contractual terms of the agreement between Mr B and Yodel Limited and does not appear to take into account any relevant factual nexus. As a reasoned judgment no submissions, oral or written, were invited which, in turn, invites the question as to what, if any, exegesis this judgment actually provides. Additionally, the final question asked by the Watford ET, and which related to how working time is to be calculated in circumstances where the individual claimant is not required to work fixed hours but is free to determine their own working pattern (subject to defined parameters), was not addressed by the CJEU. Perhaps a missed opportunity in the circumstances and certainly where such considerations will undoubtedly become more prescient given the rise in the ‘gig economy’ over recent years.

Conclusions

So, what does this mean for Yodel and other similar workers across the country? It’s unlikely that in these circumstances, where there is independence and a genuine discretion as to whether to undertake work combined with an absence of subordination, that he will be a ‘worker’ for the purposes of Directive 2003/88.

My friends can now sleep soundly now this question has been answered.

 

Darren Stewart