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Employment Law Assignment

Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514

Introduction

In case of Stuart Delivery Ltd v Augustine1, the plaintiff is Warren Augustine, and the
defenders are Stuart Delivery Limited. The legal issues of the case concern the
employment status of Mr Augustine who is a courier delivering goods for retail stores
connected by the company Stuart Delivery Ltd.

The case was first heard in the Employment Tribunal (ET) where it was determined
that the plaintiff Mr Augustine was a worker within the meaning of Section 230(3)(b)
of the Employment Rights Act 1996 (ERA 1996). The defender appealed this
decision however both the Employment Appeal Tribunal (EAT) and Court of Appeal
(COA) dismissed the appeal on the grounds that the plaintiff was under an obligation
to perform work personally and that there was no sufficient right of substitution. The
case is significant as it provides further guidance on how to determine the
employment status of workers who work in the gig economy, especially how to
balance the right to substitution and the obligation of personal performance.

The case note will proceed as follows. Section One will provide an overview of the
case including the facts and ratio decidendi. Section Two will analyse the case
placing it in a broader context of relevant law. The final section will conclude the
case note overall.

Section 1: Overview of the Case

Stuart Delivery Ltd are a French company operating in the delivery and storage
sector who developed a technology platform which connects couriers with clients via
a mobile app. The couriers would accept jobs on an ad hoc basis or would sign up to
work at particular times via the app. This would require them to be available in a
certain area for a specific time in return for a minimum £9 an hour. A courier who
signed up for a slot was able to give up this slot if another courier accepted it. If no
other courier accepted the slot the original courier would be liable for completing the
delivery and could face penalties if they didn’t do so.

On the 9th April 2017, Warren Augustine sought to bring an action against Stuart
Delivery Ltd alleging that he had been unfairly dismissed and therefore was due
certain compensation, including notice and holiday pay. Mr Augustine claimed he
was a ‘worker’ under Section 230(3)(b) of the ERA 1996 and was therefore entitled
to make this claim. The ET had to decide, based on that act, whether he undertook
his work personally in terms of the contract with company.

The ET upheld that he was a ‘worker’ while working as a courier during these
allocated slots. They found that the system of rewards and penalties depending on
his performance was in place to ensure the plaintiff worked the slots that he had
signed up for and had a personal obligation to work during those allocated times.
Although, he could request a slot to be taken by another courier, this was not held to
1
[2021] EWCA Civ 1514

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be a right of substitution because it didn’t take away his obligation to do the delivery
personally if the slot was not taken by another courier. The tribunal referred to the
decision in Pimlico Plumbers Ltd v Smith2 and found there was not an unfettered
right of substitution. He could only be released from his slot if another courier
accepted it; this was not a guarantee. He would have no control over who or if any
courier taking up the slot would be, and it would be completely unknown to them.
The tribunal held that this is not an unfettered right of substitution and therefore was
obliged to perform personally and is consequently a ‘worker’.

The defender appealed to the EAT regarding the ET’s approach to substitution in
deciding whether the plaintiff was under an obligation to perform work personally.
They appealed on the grounds that the ET erred in law and misconstrued the
guidance given by the COA in Pimlico3, regarding the person whose consent is
required for the substitution. This was however held not to be material. The defender
also argued the tribunal erred in its understanding and that the right of substitution
being conditional on another person is irrelevant; they argued having that right in the
first place meant the person wasn’t required to perform work personally. This was
rejected by the EAT who believed the ET was correct and there was no right of
substitution at all- there was merely a right to hope that someone would stand in for
you. The appeal was dismissed by the EAT.

The defender appealed again making similar arguments, and the questions
regarding the right of substitution and whether the tribunals erred in their judgment
was put before the COA. The COA upheld the decisions of both the ET and EAT.
They held there was no material error by both tribunals and due to type of
substitution in place, not being an unfettered right of substitution, the plaintiff requires
to perform the services personally and therefore is a ‘worker’ within the meaning of
Section 230(3)(b) of the ERA 1996.

Section 2: Analysis

The case concerned a highly disputed and contentious issue regarding the status of
a worker, and the decision is an important addition to the rising employment status
cases evolving in the gig economy.

The case itself does not necessarily change the current law regarding the status of
workers in the gig economy, but the decision is wholly consistent with previous
cases, in particular the Supreme Court judgement of Pimlico4. That established the
the right of substitution must not be an unfettered right in order to satisfy personal
performance, and that personal performance is required for the employment status
of a ‘worker’. The case used Pimlico5 as precedent.

The case provided us with further precedent into how similar cases regarding
employment statuses would be handled by the tribunals and courts. I believe it
correctly confirmed that Sir Terence Etherton in the case Pimlico6 was not seeking to

2
[2018] UKSC 29
3
Ibid
4
ibid
5
ibid
6
Ibid

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establish a rigid classification or set down strict rules which were binding in other
courts regarding whether a right of substitution did or did not nullify the existence of
personal performance. Instead, it confirmed the courts will look at the matter as a
whole and scrutinise the reality of the situation rather than necessarily looking at how
the contract is drafted or any previously set categories.

The implications of this ruling effects both employer and employees. Employers need
to be careful in how they operate in this area and need to ensure that their right to
substitution is a true right of substitution rather than one that is fettered. The contract
will need to be carefully drafted to ensure it is implementing the correct employee
status that they desired. Getting this wrong could prove to be very expensive for a
business and potential claim that could be made against it.

The logic behind this decision is positive as brings a greater element of fairness to
the employer/employee relationship. As the court have to look at the actual reality of
the situation it stops employers from using clever drafting techniques of a contract to
exploit the employee and stops them using substitution clauses to get around what is
termed a ‘worker’. If what is happening in practice does not match with the
contractual terms, it is likely the court will find the employee to be a worker. This
gives the worker more protection and is why I believe the decision to be a sound and
progressive one, in terms of giving workers rights and status.

This approach by the court is also consistent with international precedent. The
European Court of Justice in Allonby v Accrington and Rossendale College7 held that
although the contract said the employee was ‘self-employed’, they regraded all
factors and circumstances of the relationship between the parties and due to his
personal performance of work, was held as a worker.

Conclusion

To conclude, the case concerned an appeal regarding the employment status of Mr

Augustine and whether he was a worker within the meaning of Section 230(3)(b) of
the ERA 1996. The COA upheld the decisions by the ET and EAT and held the
claimant was a worker because there was not an unfettered right to provide
substitution and therefore he required to provide services personally and was
therefore a worker. This is based on the fact the substitution system was set up not
be intended for substitution; the claimant had no control over who was taking his slot,
and no guarantee anyone would accept it. Although the case was consistent with
previous case law, it did show how the court would approach these cases. They
would look at the reality of the situation and the facts of each case. This affect both
employers and employees, giving the employee more protection in the process.

7
(C-256/01) [2004] WL 57765