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12 October 2020

265: CitySprint couriers – workers or self-employed?

The recent case of O’Eachtiarna and others v CitySprint (UK) Ltd follows the previous Employment Tribunal ruling in 2017 that determined that a CitySprint cycle courier was a worker rather than self-employed.

The 2017 decision found that the contractual documentation between CitySprint and the claimant did not reflect the parties’ true relationship. CitySprint subsequently introduced new contracts for all its cycle couriers with a view to clarifying that they were self-employed, including a substitution clause allowing the couriers to provide a substitute in their place, and a rolled-up holiday pay clause stating that their fee would be deemed to include holiday pay if they became entitled to it.

However, five cycle couriers then brought further claims against CitySprint for holiday pay, alleging that they were still workers. CitySprint argued that these claims were defeated from November 2017 onwards, when the couriers had signed the new contracts.

The Employment Tribunal has now ruled that the couriers remained workers even after November 2017, despite the introduction of new written agreements. The right of substitution was only theoretical and had never been exercised by the couriers. Personal performance was still the dominant feature of the contract, and the couriers did not provide their services to any other company or market themselves as providing cycle courier services. There was also a default assumption that couriers would accept jobs until they signed off at the end of the day. Therefore, CitySprint cycle couriers were not self-employed and are entitled to receive holiday pay.

The Tribunal also held that the holiday pay clause was not sufficiently transparent to constitute a valid rolled-up holiday pay clause because it did not specify a sum or calculation mechanism. A remedies hearing will follow to determine the amount of compensation payable to the claimants.

 This latest gig economy decision highlights that when determining employment status, a Tribunal will look to the practical reality beyond the written documentation. For example, if a contractual right of substitution has never been exercised in practice, it may not defeat the requirement for a worker to provide personal service. This case also illustrates that rolled-up holiday pay clauses will only be valid if they are transparent, comprehensive and link pay to periods of holiday actually taken.

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