The Gig Economy: update following the CitySprint decision in the UK
A cycle courier in the UK has been successful in arguing before a UK Employment Tribunal that she is entitled to 'worker' status for the purposes of the relevant UK legislation, despite the courier's contention that she was an independent contractor.
This decision follows the October 2016 decision of the UK Employment Tribunal with respect to the 'worker' status of Uber drivers in the UK and may be indicative of a trend which may have consequences for employers in Ireland and internationally.
The gig economy workforce
- Following the Uber driver decision in the UK Employment Tribunal in October 2016, the employment law implications of certain individuals operating within the gig economy (or 'giggers') has been the topic of further discussion this month. The UK Employment Tribunal has now ruled that a CitySprint cycle courier who was hired on the premise of being an independent contractor was deemed to be a 'worker' under the relevant UK legislation. This ruling (the full text of which is available here) means that the 'worker' cyclist is deemed to be entitled to receive minimum statutory protections, such as holiday pay, which CitySprint had not previously provided to its cyclists. (For further commentary on the gig economy, our November article on the Uber driver decision is available here.)
- While Ireland does not have equivalent legislation in place which would give an individual the rights afforded to a 'worker' under the UK legislation, the UK trend of giggers who were hired as independent contractors being afforded protective quasi - employment status may be worthy of the attention of Irish employers.
The CitySprint decision
- The claimant, Margaret Dewhurst, is a cycle courier who asserted that she is a worker of the respondent, CitySprint UK Ltd., and is therefore entitled to two days' paid holidays from them. Similar to the case made with respect to the Uber drivers, Dewhurst's argument was that the reality of the relationship between her and the courier company was not a self-employed contractor arrangement (as set out in the company's contractual documentation) but rather, due to the nature of the control exerted over the cyclist and the inflexibility of the arrangement, is a relationship of 'worker' and employer.
- In concluding that the cyclist was a 'worker' for the purposes of the relevant UK legislation, the UK Employment Tribunal commented that it is necessary to look at the "relationship as a whole" and that the tender document which sets out the contractual terms of the arrangement is not consistent with the manner in which the services are carried out. In reaching its decision, the Employment Tribunal was particularly influenced by:
- the nature of the relationship between the couriers and the company's clients
- the practical restrictions on permitting a substitute to carry out the courier services
- the lack of flexibility allowed in relation to the couriers' acceptance of jobs
- the overall control exerted by CitySprint on its couriers' performance of the services
What does this mean for Irish employers?
- As with the Uber decision, the CitySprint decision does not have any direct effect in Irish law, due to the differences in our legislation in this area. However, it serves as a further reminder to employers in Ireland that there is a trend emerging whereby the status of workers engaged in the gig economy is being challenged in the Courts.
Dublin Bus Ghost Bus v Declan Mills
- A recent decision of the Workplace Relations Commission is a timely reminder to Irish employers that decision makers in Irish employment law fora will look at the reality of the arrangement in place between the parties in order to determine whether or not it is an employment relationship. In Dublin Bus Ghost Bus v Declan Mills (UD1634), the Labour Court upheld a decision of the Adjudication Officer that an actor who had been engaged in a 'commercial arrangement' with Dublin Bus and another third party to conduct performances on a tour bus was in fact employed by Dublin Bus on a contact of service.
- Although there was no contract of employment in place between Dublin Bus and Mr Mills, the Labour Court examined the control exerted by Dublin Bus over Mr Mills, the mutuality of obligation with respect to the individual tours booked, the opportunity to sub-contract the work and Mr Mills' ability to influence the profit accruing to him. Taking the entirety of the relationship into account, the Labour Court determined that Mr Mills was employed by Dublin Bus and therefore was entitled to take a claim under the Unfair Dismissals Acts 1977 to 2015 in relation to his dismissal.
Consequences of incorrect classification of employment relationships
- Both of these recent decisions demonstrate the importance of effectively managing and classifying employers' relationships with its workforce. Where a relationship has been held out as an independent contract but the reality of the arrangement is found to be an employment relationship, the individual will automatically attract all of the legislative protections afforded to employees in Ireland. This may mean that the employer is liable for costs and/or penalties which it may not have anticipated, as well as being obliged to comply with additional legal obligations with regard to that individual going forward.
- Employers can mitigate the risk of being faced with such additional obligations by reviewing existing practices and ensuring they are adequately protected from employment status claims.
Date Published: 30 January 2017