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Delivery drivers were not workers or employees

Yet another appeal case has highlighted the complexity of the UK’s employment status landscape with the Employment Appeal Tribunal (EAT) upholding a decision that owner driver franchisees who provided delivery services to DPD were neither employees nor workers.

In the case of Stojsavljevic and another v DPD Group UK Ltd the EAT considered whether or not the drivers were required to provide the service personally under the terms of their franchise agreement.

Summary

The claimants argued that they were contracted as individual drivers, with sole responsibility for the agreed delivery and collection services and that there had been an oversight on the part of the franchisor in respect of vetting drivers employed by the franchisee. This, it was claimed, suggested “a degree of control beyond that of an individual carrying on business in their own capacity”. However, there was an option in the agreement to use cover drivers in certain circumstances. Although in practice the claimants had only used cover drivers who were also owner driver franchisees, the EAT found that there was a broad contractual right to use any substitute at any time.

On reviewing the franchise agreement and relevant case law, including Autoclenz and Pimlico, the EAT found that “there was, both on paper and in practice, an unfettered right of substitution” and that this was inconsistent with personal performance and inconsistent with both employee and worker status.

Comment

We are seeing a diversity of business models emerging and evolving. Franchisors like DPD and app-based businesses like Uber have a unique relationship with the people who provide the services they bring to market. The gig economy argument about whether these people are workers or employees has been raging for some time and this case demonstrates that there are situations in which they are neither one nor the other. The one thing to take away from this appeal judgement is that those bringing a non-traditional business model to market must have robust agreements in place to indicate the precise nature of the relationship between them and those delivering their services.