By way of reasoned order, the European Court of Justice ("ECJ") has identified particular circumstances in which the EU Working Time Directive (No.2003/88) ("WTD") is to be interpreted as precluding an individual engaged as a self-employed contractor from being classified as a 'worker'. Though it was indicated that the individual in the case of B v Yodel Delivery Network Ltd did not have 'worker' status, the ECJ left the final determination to the referring Tribunal.
The Claimant ("B") is a parcel delivery courier, engaged under a courier services agreement with the Respondent ("Yodel"). The agreement stipulates that B is a 'self-employed independent contractor' and contains a contractual right to appoint a suitably qualified substitute. B is able to work for competitors without restrictions, and neither B nor Yodel are obliged to accept or provide any work. B largely has flexibility on when to deliver and the route which is taken, with payment being made at a fixed rate for each parcel, varying according to the place of delivery.
B brought claims under the Working Time Regulations 1998, claiming that his status was that of a 'worker'. However, the Tribunal considered the contractual right to substitute and the unrestricted right to work for several customers simultaneously, to be incompatible with the classification of a 'worker' under UK national law. The Tribunal were therefore concerned as to the compatibility of UK national law, with that of EU law under the WTD and accordingly referred a number of questions on the issue of 'worker' status to the ECJ for preliminary ruling.
As opposed to giving a judgement, the ECJ instead made a reasoned order under Article 99 of its Rules of Procedure, on the basis that the reply to the referring Tribunal may be clearly deduced from existing case-law or admits of no reasonable doubt. The ECJ firstly noted that the WTD does not define the concept of ‘worker’, which has an autonomous meaning specific to EU law. Being classified as an 'independent contractor' under national law was held not to preclude classification as an employee under EU law, if such independence was merely notional.
The essential feature of an employment relationship was identified as the performance of duties under the direction of another in return for remuneration. The ECJ referred to the flexibility of the nature and execution of work, together with the existence of a hierarchical relationship as being crucial factors to consider when making an overall assessment of the circumstances, which was clearly stated to be for the national court to carry out.
In order to assist the referring Tribunal, the ECJ identified significant points for consideration when making its determination. It referenced the great deal of discretion afforded to B, including:
- the contractual right to appoint a suitable substitute;
- the ability to accept, decline or set a limit on work undertaken;
- the ability to provide services to any third party (including competitors); and
- the flexibility to fix hours of work within parameters and tailor these to suit their personal convenience.
In circumstances whereby such discretion is afforded, provided there is not a relationship of subordination and the independence of the individual is not fictitious (which the court indicated was not apparent here), it was ordered that the WTD must therefore be interpreted as precluding an individual engaged as a self-employed independent contractor from being classified as a 'worker'.
However, it was held to be for the referring Tribunal to make the final determination on the individual's professional status, taking account of all the relevant factors relating to that individual and the economic activity carried out.
The question mark over 'worker' status has long been a concern for those operating in the so-called 'gig-economy'. It will be interesting to see the Employment Tribunal's interpretation, following the ECJ's very clear direction. There will no doubt be a watchful eye over how this will impact the long-awaited Supreme Court case of Uber BV and others v Aslam and others, currently scheduled to be heard 22 and 23 July 2020. We will keep you updated.
Authored by Rosalind McArdle