Have my courier subcontractors suddenly become workers with rights?

Here’s an update (March 2019) on what “Workers” look like and what sort of benefits they are entitled to in the UK, which may help people running courier companies in the UK.

A “Worker” is a fairly recent category of person in the workplace, sitting somewhere between “PAYE employee” and fully and genuinely “self employed”. It’s usually used when talking about the gig economy.

This new category of employee is likely to be of interest to people and companies “employing” or working with couriers as part of their courier business, as some of the ways in which courier companies are run can mean that the couriers doing the work may have recently gained some employment rights.

Below is a list of things that can mean that a courier is a Worker. Some of these are often the case in a courier business where the courier “signs up” for regular work, perhaps based at the courier company’s offices, and/or given a “guaranteed minimum”, and/or provided with a company van or bike to use.

A courier could be classed as a ‘Worker’, rather than “arm’s length” self-employed if:

  • The courier has a contract to do work or carry out services personally in return for a fee, ie the courier company agrees to give the courier a regular flow of work in return for the courier’s availability.
  • The courier is expected to do the work personally, so isn’t expected to send someone else to do the work, ie to subcontract it. ie it is not part of the understanding that the work will be further subcontracted.
  • The courier is expected to “turn up for work”, rather than having a choice about it. ie the courier is expected to stand by, at a time and a location of the courier company’s choice, with a view to being available for work from the company, and is not usually able to refuse to do so.
  • The “employer” (the person or company handing out the work) has courier work for the courier to do for as long as the agreement lasts, ie it’s more than a one-off arrangement, and to pay the agreed rate for it.
  • The courier isn’t carrying the work on behalf of his/her own personal limited company in an arrangement where the courier company is actually a customer.

So it’s easy to see how this could affect a courier company. Why is this important? The reason this can be important to (and possibly expensive for) a courier business is that Workers are entitled to specific employment rights, including:

A Worker’s employment rights in the UK:

  • being paid the National Minimum Wage
  • protection against unlawful deductions from wages
  • the statutory minimum level of paid holiday
  • the statutory minimum length of rest breaks
  • to not work more than 48 hours on average per week or to opt out of this right if they choose
  • protection against unlawful discrimination (although, of course, everyone has this protection under the law)
  • protection for ‘whistleblowing’ – reporting wrongdoing in the workplace
  • to not be treated less favourably if they work part-time

They will also be entitled to:

  • Statutory Sick Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Adoption Pay
  • Shared Parental Pay

Workers aren’t entitled to:

  • minimum notice periods if their employment will be ending, for example if an employer is dismissing them
  • protection against unfair dismissal
  • the right to request flexible working
  • time off for emergencies
  • Statutory Redundancy Pay

Even more important for courier businesses could be that casual or irregular work is also covered by recent rulings:

A courier is also likely to be a Worker if most of these apply:

  • The courier occasionally does work for a specific courier business
  • The courier business doesn’t have to offer the courier work and he/she doesn’t have to accept it, ie he/she only works when they want to
  • The courier’s agreement with the courier business describes the relationship as ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or similar.
  • The courier had to agree with the courier business’s terms and conditions to get work, either verbally or in writing
  • The courier is under the supervision or control of a manager or director
  • The courier can’t send someone else to do the delivery work
  • The courier business deducts (or should deduct) tax and National Insurance contributions from the courier’s “wages”
  • The courier business provides a vehicle, clothing or other equipment the courier needs to do the work.

The above can mean that many courier businesses run in the “traditional” way, ie taking work from the customer and subbing it to a fleet of regular or casual subcontractor couriers, can now risk being challenged in the courts, if the business is not offering rights and protections to their couriers, as they may well now actually be Workers. Even if you can defend your case successfully in court, this can be expensive in time and lawyers’ fees.

Many courier companies now take steps to keep the relationship with their courier subcontractors very much “at arm’s length”, ie no terms and conditions to sign or agree to, no uniform, no company van, no guaranteed pay or work, no management supervision, no limits on subcontracting, just a simple straightforward and genuine trading relationship where the courier business offers work and the courier offers acceptable terms to carry it out, including accepting the commercial risk involved. Your professional advisor will be able to tell you if these cases are relevant to your situation.

There have been cases recently, some successful, against businesses in or close to the same day courier industry, such as Hermes, Uber, Addison Lee, City Sprint, Excel and eCourier. It’s worth bearing in mind that the court will examine and decide on the exact nature of the relationship, not just at what the relationship is called.

You can read about them here.

Care is also needed, (and professional advice is well worth taking on this point), because an individual can be a Worker in one employment context, and an Employee in another: it all depends on the substantive arrangement between the parties. For example, the tax and deductions rules may be different to the employment rights rules.

Obviously, you should always seek professional advice about how you run your courier business, to make sure that you are operating within the law, and not vulnerable without knowing it to expensive legal action and/or claims. We in this blog are unable to provide what lawyers call “reserved legal activities”. Therefore this blog post does not constitute legal advice, and in no circumstances should it be construed as such. Liability for any claims, contractual or otherwise, arising out of reliance upon the content of this blog post or any blog post on this website in no way falls upon mtvan.com Ltd or any person, or employee, or company associated therewith.

Further information here: www.gov.uk/employment-status/worker.


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