Limited Right of Substitution

The question of “personal performance” is one of the key determinants of employment status. Employees and workers are required to deliver work in person and cannot introduce a substitute to work on their behalf. Those who are genuinely self-employed can use a substitute.

Stuart Delivery Ltd had developed technology connecting couriers with clients via a mobile app. Couriers could opt to undertake ‘ad hoc’ or ‘slot’ deliveries. In the case of slot deliveries, they were required to commit to being available in a certain place at a certain time, in return for a minimum rate of £9 per hour. A courier could release a slot, making it available to other couriers, but if no one accepts, then the original courier remains liable for completing it.

Mr Augustine submitted various claims against the company. As a preliminary matter the employment tribunal had to consider whether he was under an obligation to perform services personally, as required for ‘worker’ status.

It concluded that the release procedure did not amount to an unfettered right of substitution, since Mr Augustine would only be released from his obligation to undertake the slot if another courier signed up. He had no control over whether this happened. In the tribunal’s view, this was a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent. This is consistent with personal performance. The tribunal went on to hold that the company was not a client of any business run by Mr Augustine.

The company appealed to the Court of Appeal on the question of the right of substitution, arguing that the ability to substitute meant Mr Augustine was self-employed. But the appeal was unsuccessful.

The Court of Appeal started by confirming that the issue for a tribunal is whether Mr Augustine was under an obligation personally to perform the work or provide the services.

The Court concluded that the tribunal was entitled to find that Mr Augustine was a worker. Among other things, it was clear that the tribunal had considered all the relevant matters when considering the question of whether any right or ability on the part of Mr Augustine to substitute another person was inconsistent with an obligation of personal performance. The system set up by the company was intended to ensure that Mr Augustine did carry out the work, particularly that he did turn up for the slots that he had signed up for and do the delivery work during those slots. That was necessary for the company’s business model to work. The limited right or ability of Mr Augustine 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.

As a worker, Mr Augustine was therefore able to submit his claims.

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Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.

Copyright © 2021 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.