Recent Judgments in the UK looking at the operation of companies such as Uber, Deliveroo and Addison Lee have raised questions about employment status and rights.
In both Jersey and the UK it is an individual’s employment status (combined with any required length of service) that determines which statutory employment rights apply and employer’s responsibilities as a result. The rise of new business models, employment practices and the ‘gig economy’ have caused increasing numbers of disagreements around the employment status of individuals in the UK and thus the application of employment rights.
In the UK, when looking at employment rights you have those who are considered employed, as either an ‘employee’ or a ‘worker’. Or those who are self-employed. A genuinely self-employed individual does not have personal entitlement to employment rights but must provide them to any staff that they employ. In Jersey we have one definition of an employee but as cases before the Jersey courts have shown (such as in Vibert v Agent Ltd (15 April 2016), “The term “employee” is defined widely…encompassing what under English law might be termed a ‘worker’.”
In 2017, the Jersey Employment Tribunal in the case of Bisson -v- Dore & 1 Or. looked further at the definition of an employee under Article 1A of the Employment Jersey Law 2003 (EJL) and distinguished between what are known as ‘1A2’ and ‘1A3’ employees. A ‘1A2 employee’ is someone who is employed and working under a contract of employment. For a contract of employment to exist, there must be a mutual obligation for work to be provided by the employer and carried out by the employee and a sufficient degree of control exercised by the employer over that work. A ‘1A3 employee’ is someone who provides their personal services as part of a profession or business undertaking carried on by someone else. This is a broader definition, which covers a contract under which the individual is obliged to provide personal services on behalf of their employer, where the personal services are not provided to a client or customer of the individual undertaking the work directly. If the individual (not their employer) were providing the service to the client or customer direct, then they would be self-employed.
In a case concerning a local cab app company, Red Appco Cabs Limited in 2016, the Jersey Tribunal analysed in detail both the provisions of Article 1A EJL and the relevant English case law. The Tribunal noted that in the UK the distinction between employees equivalent to Article 1A2 and 1A3 workers would be of great importance because Article 1A employees would have greater employment rights, with A13 workers being considered ‘workers’, with less rights under UK law. The Jersey Tribunal went on to say that: “In Jersey, however, both groups are treated identically; they are both ‘employees’ for the purposes of EJL 2003, each enjoying identical rights arising from that employment status.”
An area where both UK and Jersey case law do agree, is that employment status is determined by the characteristics of the working relationship and not simply by what an employment contract says or what an employer tells their employees about their employment status. It is the substance of what is going on, rather than the form of any contractual document that an employment tribunal looks at in determining employment status. In a recent UK case Uber drivers were found to be workers and not self-employed, despite clear contractual documentation signed by the drivers stating they were ‘self-employed’. The same applied to Addison Lee drivers who worked for the London based private taxi service. The Addison Lee contracts referred to the drivers as ‘independent contractors’ and yet the drivers were found to be workers. This was because once logged onto the Addison Lee system, the drivers were deemed to be available for work and expected to accept it. A refusal to accept work also resulted in possible sanctions. A different approach was taken in the case of Deliveroo in the UK and in Jersey Red AppCo Cabs Ltd because the operations were set up in such a way to indicate a self-employed status, with individual contracts existing between those providing and those receiving the service.
The decisions against Uber and other ‘gig economy’ ventures are a stark reminder for employers that the wording of a contract offers no protection, if a contract does not reflect the true nature of working relationships. It is important when structuring business operations to look carefully at the functioning of working relationships in practice and consider whether they are likely or not to be viewed as forming an employment relationship and status that would bring with it employment rights.
For further advice on Jersey employment matters, contact Advocate Caroline Dutot on 01534 481809 or email@example.com