A recent tribunal case continues the long line of case law on employment status which has found that it’s the reality of the situation that is key to establishing the true employment status of an individual. Here we explore employment status and the case of Bandi and others v Bolt.
Employment status unpacked:
Self-employed, worker, or employee – these are the three ways an individual can perform work.
Employees are those that are hired directly by an employer to provide a personal service. They are under the control of the employer as well as being part and parcel of it. There is also a mutuality of obligation for the practice to offer work and for the individual to undertake it.
A worker is someone who has a contract to personally perform services for the practice, but they have a substantial amount of freedom over where, when, and how much work they do. The work carried out is more casual with a worker, it is often less structured with no guaranteed hours.
If they are in business on their own account, they provide their own equipment, have control over the work that they do and how they do it, and they can provide a substitute, then they are likely self-employed.
Employees have more rights than workers. Only employees, for example, qualify for employment protection rights like guaranteed pay, protection from unfair dismissal, redundancy payments, and the right to notice. Workers have some basic rights including the right to be paid no less than the National Minimum Wage, protection under equality law, and the right to breaks at work on a daily and weekly basis as well as to paid holidays. The self-employed have certain rights in respect of, for example, trade unions and discrimination. Any other rights will be as agreed between the parties subject to the agreement to perform the work, which is subject to civil law.
If an individual is labelled incorrectly, they could be denied their rights. Ultimately, it could result in claims being brought to the employment tribunal.
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A real-life case:
The claimants in the case of Bandi and others v Bolt, are some 10,000 private hire drivers who carry passengers for pay in the name of Bolt, a rival to Uber, in various locations throughout the UK. Their work is allocated to them via the Bolt App. The drivers argued that their employment status was that of workers. They brought claims for failure to pay the minimum wage and failure to provide leave.
The Employment Tribunal (ET) rejected the respondent’s argument that the drivers were self-employed and held that, in reality, on each assignment the drivers were employed by Bolt as “workers”. The drivers carried out the work personally – they were not permitted to transfer the App or to pass tasks to any substitute. Whilst the drivers were free to reject or cancel trips, the ET held that this did not affect their obligation of personal service in respect of trips that they did accept and carry out. The ET said that it is hard to characterise the driver as a business and even harder to characterise Bolt as the driver’s customer. Whilst the respondent’s counsel tried to argue that the way it operated its pricing favoured their argument that Bolt was the client/customer of the driver, the ET, however disagreed. This was because they said that a person running a professional practice or business is able to dictate the terms on which their goods or services are offered to the market. The drivers had no such freedom because their remuneration was and is strictly on Bolt’s terms. As a result of the ET’s findings that the claimants were workers, they were successful in their claims.
Takeaway points:
Whilst this case is only an ET, and therefore not binding on other courts, it continues the long line of case law on status which has found that it’s not just the contract that dictates the individual’s employment status, but the reality of the situation. Looking beyond the contract and establishing how it is operated in practice is therefore an important part of determining employment status and something that employers, especially those in the gig economy, need to be aware of.
Organisations, therefore, need to be careful when it comes to maintaining the status they want for those who undertake work or services for them. They need to ensure that the contractual documentation is drafted in a way that clearly sets out that status and ensure that, in practice, it operates under the terms of that agreement and remains true to the intention set out in them, ie to establish contractor or employment status. To do otherwise, as in the Bolt case, could lead to individuals being found to have employment status and all that entails, including basic employment rights.
