More news about modern working practices and the “gig economy”

Last week’s news was dominated by the Budget and the Class 4 National Insurance contributions’ increase which was announced and then, within 24 hours, kicked into the long grass. An interesting fact which emerged in the news is that the UK workforce now includes 15% who are classed a self-employed for tax purposes. However, as I have reported this month (in the Pimlico Plumbers case) many of these people are nonetheless classified as workers in the context of employment law and therefore have rights which can be pursued in employment tribunals.

On 22 February The Work and Pensions Committee heard evidence from executives from Uber, Deliveroo, Amazon and courier firm Hermes UK as part of its investigation into modern employment practices. It is estimated that there are now some five million workers in the “gig economy”, of whom some 910,000 are on zero hours contracts, an increase of 100,000 from 2015 to 2016 (ONS Labour Force Survey). UK and Ireland managing director of Deliveroo, Dan Warne, said that flexibility is important to its riders, adding:
We cannot offer that amount of flexibility to those riders if we’re forced to pay a given wage and a given hour to every single rider.
However, it emerged recently that Deliveroo had a clause in its contracts that banned workers from contesting their self-employed status in employment tribunals. Under questioning, Mr Warne acknowledged that the Company needed to “revise the contract”. He said:
This is not something that’s enforced, so there’s no need to have it in there… In practice, if they wished to contest their [self-employed] status they could do so and we wouldn’t challenge them on that.
Although the clause would almost certainly not have been enforceable, it is easy to see how it could operate as a powerful disincentive to low-paid riders with no guarantee of work.

Meanwhile, it has emerged that DPD, which deliver parcels for Marks & Spencer, John Lewis and River Island, fines their couriers £150 per day if they cannot find cover when they are ill. This has resulted in drivers being forced to work when they are sick. The fine, which is described as “liquidated damages”, means that couriers who earn on average £200 a day, lose £350 if they cannot work through illness and are unable to find a substitute. Chair of the select committee, Frank Field, commented:

The gig economy is producing wave after wave of evidence on the grim reality of life at the bottom of Britain’s labour market…A group of companies now controls the working lives of an unknown number of people, and yet evades its own responsibilities as employers and taxpayers by labelling those people as self-employed… This move [by DPD] makes the rest of the gig economy look as though it operates in the Garden of Eden.

A local example of dubious working practices came to light a few weeks ago. Mooboo Bubble Tea, a cafe chain, has a branch located in Liverpool One. New staff reported that they were being made to work a 40-hour trial shift with no pay and no guarantee of a job, apparently in direct breach of the minimum wage regulations.

How (not) to communicate a dismissal

Can a dismissal be implied by the failure of an agency employer to find work for an employee? This was a question considered by the Employment Appeal Tribunal (EAT) in the recent case of Sandle v Adecco. The EAT concluded that in order to prove there had been a dismissal, an employer’s unequivocal intention to dismiss must have been communicated to the employee in question.

By way of background Miss Sandle, the Claimant, was an agency worker employed by Adecco. When the Claimant’s assignment working at another company terminated, Adecco failed to take any action to find her further work and, given the Claimant’s failure to contact them, ‘assumed’ that she was not interested in further agency work. Clearly this was not the Claimant’s view and she subsequently brought a claim of unfair dismissal against Adecco.

The EAT held that in the absence of either a resignation from the employee or communication of dismissal from the employer, there could be no dismissal and nor could one be implied by either party’s inaction.  It was therefore concluded that the Claimant remained employed at the time her unfair dismissal claim was lodged and thus, as she could not evidence the fact that she had been dismissed, her claim failed.

Definition of a ‘worker’ in whistleblowing cases

Further to Susan Stafford’s article earlier this month in respect of whistleblowing, in the recent case of McTigue v University Hospital Bristol NHS Foundation Trust, the Employment Appeal Tribunal (EAT) has provided clarification regarding when an agency worker can claim protection for whistleblowing against an end user using the extended definition of a workers under section 43K of the Employment Rights Act 1996.


The claimant in this matter is a nurse who was employed by an agency and placed to work at the respondent NHS Trust.  She brought a claim for protected disclosure detriments against the respondent under the Employment Rights Act 1996 (ERA). Under the ERA , only employees and workers are eligible to bring such claims against their employers. At first instance, the Employment Tribunal found that the claimant could not be categorised as such an employee/worker and her claim failed. The claimant therefore appealed to the EAT.


The claimant argued that she was employed by the Trust for the purposes of bringing a whistleblowing claim because she fell within the extended definition of “worker” at s.43K(1)(a) ERA, which states as follows:

“…an individual who is not a worker as defined by section 230(3) who—

(a) works or worked for a person in circumstances in which—

(i) he is or was introduced or supplied to do that work by a third person, and

(ii) the terms on which he is or was engaged to do the work are or were in practice substantially determined not by him but by the person for whom he works or worked, by the third person or by both of them…”


The respondent however presented the counter-argument that the Tribunal had been correct to find that it had not “substantially determined” the terms of the claimant’s engagement, as her terms were largely determined by her supplying agency work. The respondent further stated that as the claimant was undoubtedly a worker  in relation to the agency, she could not also be a worker of the Trust for the purposes of s43K(1)(a) ERA as that extension only applies to “an individual who is not a worker as defined by section 230(3)”.


The EAT held

What are the likely implications of Brexit on UK Employment Law/HR practices?

Employers may not be aware that much of the current legislation in place to protect employee rights actually derives from the European Union – for example, working time regulations, rights of the employees on a business transfer (TUPE) and family leave rights to name but a few. Indeed some Politicians for the ‘Leave Campaign’ will no doubt have argued that such laws were inhibitive to British businesses and produced too many rules and regulations having a negative effect on both time and profits.

What is likely to happen?

In reality it is doubtful that the UK Government would look to repeal any employment law which implements minimum EU requirements, the reason being that many of these laws simply complement existing UK law (equal pay rights for example). In addition, much of our existing employment law simply reflects good/acceptable practice in business (or indeed life generally!) such as the right not to be discriminated against on the grounds of sex, age, disability etc. Furthermore some UK Laws actually go above and beyond the minimum requirements of EU legislation – in respect of holidays for example, the EU Working Time Directive 2003/88/EC only requires EU Member States to provide for a minimum of 20 days’ annual leave for employees, whilst the UK statutory minimum leave entitlement is actually 28 days inclusive of normal bank and public holidays.

As a final point it is worth noting that despite a (potential) Brexit, the UK will still need to maintain strong trading relations with Europe. If the UK is a member of the EEA (European Economic Area) it would be required to remain subject to many aspects of EU employment law.

In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with. The following are areas that may be most susceptible to change:

consensual termination of employment cannot be assumed

Francis v Pertemps Recruitment Partnership Ltd concerns the dividing line between dismissal and termination of a contract by mutual consent. Mr Francis was a temp in the fortunate position of having a contract of employment with an agency – who supplied him to Transco to do administrative work. When the successors to Transco’s business, SGN, no longer required his service, he was given the choice of taking a redundancy payment or hanging on while the agency looked around for new work for him.
On his return to Pertemps on 12 December 2006 (yes 2006 – it has taken that long to resolve!) he had the options outlined to him (in rather inelegant terms):
Depending on how you feel yourself, whether you are happy for Pertemps to keep on looking for another assignment for you elsewhere, and we do have other bits and pieces in at the moment or things coming up in the New Year, that we’ll be happy obviously to speak to you about or…there might be an entitlement for you to a redundancy payment from Pertemps because of the work you have previously…for the last two and a half years…has come to an end.
He was also told that in either case he would receive a payment of two weeks’ pay, described as “notice pay”.
To start with he opted for staying on, but then he concluded the chances of something turning up were slim, and as he would not be able to claim jobseekers’ allowance if he remained with the agency, he changed his mind. He also lacked faith that he would be engaged through Pertemps to work in a possible opening at the Scottish Parliament. He was then given a letter which looked suspiciously like notice of termination:
Following your meeting of 12th December 2006 it is with regret that I confirm the position of Process Assistant will become redundant with effect from 12th December 2006…Please treat this letter as formal notice of redundancy…In accordance with your contract of employment you are entitled to two weeks notice, therefore your last date of employment will be recorded as 26th December 2006.
The letter was written by an HR advisor and is, on any reading, a pretty poor effort. Mr Francis exercised his right of appeal and in February 2007 his redundancy was confirmed.

Agency Workers Regulations 2010 – it’s not all doom and gloom!

The Agency Workers Regulations 2010 SI 2010/93 came into force on 1 October, giving effect (eventually) to the 2008 EU directive on temporary agency work. The government has given in to the inevitable, albeit not gracefully – there is still talk of removing any "gold plating" of the EU requirements, for example by amending them to take one man service companies out of the scope of the regulations.
As reported last month and in brief, the Regulations give agency workers the right to equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer. Most of these rights apply after 12 weeks’ service but some, notably the right to access to the hirer’s facilities such as a canteen, transport between sites or a creche, and to access to information on permanent vacancies, apply from day one.
There has been a lot of coverage on the possible negative impact on the economy (see for example this report from Allen & Overy of 12 September 2011), but in the spirit of "it’s not all doom and gloom", here are a few points which may reduce the impact for individual employers