Another setback for the gig economy as a courier is found to be a ‘worker’

29 January 2020

The gig economy has suffered another loss in the Employment Tribunal as Mr Augustine, a courier engaged by Stuart Delivery Ltd (the Respondent), was found to be a worker and entitled to pursue his claims for unauthorised deductions from wages, holiday pay, less favourable treatment as a part-time worker and breach of the National Minimum Wage Act 1998.

The Respondent operates in the logistics, delivery and storage sector. Its business model is a technology platform which it says enables couriers to connect with clients in order to move and deliver goods around the country. The Tribunal’s view was that it was a delivery company requiring a fleet of couriers. The question before the Employment Judge was whether those couriers were engaged as independent contractors, workers or employees. This involved looking beyond the written contract at the reality of the situation.

What happened in practice?

Once a courier had completed the ‘on-boarding’ process with the Respondent, they were given access to the app which enabled them to sign up for delivery jobs. The courier could choose whether to sign up to ad hoc jobs or commit to being available throughout a particular period of time (called a ‘slot’) in return for a guaranteed minimum payment. For the purposes of this claim, the Tribunal was asked to consider the status of the couriers when they had signed up to a slot.

Once a slot was accepted, the courier had to remain within a specified zone and, if they logged off the app for more than 6 minutes or refused more than one job during the slot, would not qualify for the guaranteed minimum payment. There were limited circumstances in which a courier could cancel a delivery once it had been accepted.

Any courier who had committed to a slot but was no longer able to complete it was able to release the slot, whereupon any of the other couriers could accept it. This occurred often, with 77%-90% of active couriers releasing slots in any given month. However, if the released slot was not picked up by any other courier, the original courier remained responsible for completing the job.

The Respondent could impose penalties on couriers for persistent failures to complete a job – for example, removing eligibility for a performance-related bonus and suspending access to the app.

Worker status confirmed

Both the Employment Tribunal and the Employment Appeal Tribunal found that Mr Augustine was a worker. The EAT agreed with the Tribunal’s conclusion that Mr Augustine was not in business on his own account – that is to say, the Respondent was not a customer of Mr Augustine’s own courier business. It was noted that, during any slot, the courier could not work for any other delivery company because of the risk of suffering penalties.

On the issue of personal service, the EAT held that there was no unfettered right of substitution because it was the Respondent who had ultimate control over any substitute, since they had to come from the pool of couriers who had access to the app.

It is part of the Good Work Plan, which is supported by the government, to provide clarity on the definition of worker status. So far, there has not been any indication as to when that part of the Plan may be put into effect. In the meantime, we can expect to see more cases like this as individuals seek to clarify their worker status.

By Michelle Tudor

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