[UK] Substitution Clause and Employment Status

Mr Augustine was a self-employed delivery driver and sometimes engaged in fixed hours “slots” for Stuart Delivery Limited (SDL).  During these slots, Mr Augustine was required to be under the control of SDL and prevented from accepting other work.  He could sign this slot over to another delivery driver but had no control over who picked up the slot that was released.  SDL disputed Mr Augustine’s claim that he was either an employee or a worker.

In the Employment Tribunal in April 2018, a Reserved Judgement found him not to be an employee under the Employment Rights Act 1996.  Therefore, Mr Augustine’s claims against SDL for employment rights was dismissed.  But the fact that he could sign his slot over to another worker did not amount to the right to substitution.  So, when he was working these slots, the Tribunal found that he was a worker (as per the Employment Rights Act again).  So his claims for unauthorised deductions from wages, holiday pay, breaches of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 and breach of the National Minimum Wage Act 1998 were considered but referred to the Employment Appeals Tribunal for a ruling.

In a judgment handed down on the 5^th of December 2019, the Employment Appeals Tribunal (EAT), they agreed with the Tribunal’s ruling.  During the time that he was working one of the slots, Mr Augustine should have an employment status of worker,  as he was not at the disposal of other employments and could not be considered self-employed.  

Global Payroll Association Comment 

Stuart Delivery Limited v Augustine is another complicated ruling about employment status.  The long and short of the ruling from the Tribunal (with the EAT agreed with) is that employers need to look at the facts of the matter before coming to a conclusion about whether an individual is self-employed, a worker or an employee. 

Employment status is so important for determining factors such as entitlement or non-entitlement to things like holiday pay.  It could become even more important should the Finance Bill in 2020 contain the legislation for off-payroll working.  This brings with it an employment status for tax, that of a deemed employee, i.e. deemed to be an employee for tax, NICs and Apprenticeship Levy but not for employment rights.

Mr Augustine was a self-employed delivery driver and sometimes engaged in fixed hours “slots” for Stuart Delivery Limited (SDL).  During these slots, Mr Augustine was required to be under the control of SDL and prevented from accepting other work.  He could sign this slot over to another delivery driver but had no control over who picked up the slot that was released.  SDL disputed Mr Augustine’s claim that he was either an employee or a worker.

In the Employment Tribunal in April 2018, a Reserved Judgement found him not to be an employee under the Employment Rights Act 1996.  Therefore, Mr Augustine’s claims against SDL for employment rights was dismissed.  But the fact that he could sign his slot over to another worker did not amount to the right to substitution.  So, when he was working these slots, the Tribunal found that he was a worker (as per the Employment Rights Act again).  So his claims for unauthorised deductions from wages, holiday pay, breaches of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 and breach of the National Minimum Wage Act 1998 were considered but referred to the Employment Appeals Tribunal for a ruling.

In a judgment handed down on the 5^th of December 2019, the Employment Appeals Tribunal (EAT), they agreed with the Tribunal’s ruling.  During the time that he was working one of the slots, Mr Augustine should have an employment status of worker,  as he was not at the disposal of other employments and could not be considered self-employed.  

Global Payroll Association Comment 

Stuart Delivery Limited v Augustine is another complicated ruling about employment status.  The long and short of the ruling from the Tribunal (with the EAT agreed with) is that employers need to look at the facts of the matter before coming to a conclusion about whether an individual is self-employed, a worker or an employee. 

Employment status is so important for determining factors such as entitlement or non-entitlement to things like holiday pay.  It could become even more important should the Finance Bill in 2020 contain the legislation for off-payroll working.  This brings with it an employment status for tax, that of a deemed employee, i.e. deemed to be an employee for tax, NICs and Apprenticeship Levy but not for employment rights.