Mr B Virag v Smart Services Logistics UK Ltd: 2305928/2021

Case No: 2305928/2021 1 EMPLOYMENT TRIBUNALS Claimant: Mr Bela Virag Respondent: Smart Services Logistics UK Ltd Heard at: London South by MS Teams On: 8 November 2023 Before: Employment Judge Jones KC Appearances For the claimant: In person For the respondent: Mr Marc Ramsbottom, Consultant DECISION 1. The Claimant is a “worker” for within the meaning of Employment Rights Act 1996, s. 230(3)(b); and 2. The Claimant I a “worker” within the meaning of Working Time Regulations 1993, Reg 2. REASONS Introduction 1. The Respondent describes itself as a logistics/delivery company. The activity that they are engaged in is an increasingly familiar one. One strand, by way of example, is that members of the public buy goods online. The online retailer will then entrust the items to a delivery company. Sometimes that company is a national organisation. Sometimes that delivery company will sub-contract to a smaller operation (“the Courier Business”). That Courier Business will very often then at least purport to further sub-contract to an individual driver. 2. Disputes commonly arise as to the employment status of the individual driver. The Courier Business asserts that the driver is in business on their own account and is neither an employee nor a worker for the purposes of the definitions in the Employment Rights Act 1996 and elsewhere. The driver will contend that they are either an employee or, at least, a worker. Case No: 2305928/2021 2 3. It is common to find that the driver has signed a contract which has been drafted by the Courier Business. The contract will contain at least one clause which either records an agreement that the driver is not an employee or worker, asserts that they are an independent contractor, or does both. More often than not there is a clause allowing an employee to use a substitute to fulfil his duties. 4. In order to underscore the driver’s independent contractor status, he will be paid against invoices. However, almost invariably, those invoices will have been drawn up for him by the the Courier Business. In other words, they effectively invoice themselves. Sometimes (as was the case in the Uber litigation) the individual driver may never even see the invoice. 5. Usually, the individual driver will not have been much troubled about their status until the relationship breaks down. They may well have been taking advantage of the tax treatment of their income afforded to independent contractors. However, when the relationship does break down, the question of their status becomes critical to their ability to invoke the statutory protections for employees and workers. In such circumstances, the Tribunal has to step in and examine the relationship in order to determine whether or not the driver can avail themselves of the protections. This is one such case. The Hearing 6. By an order dated 10 February 2023 a one day open preliminary hearing was listed in order to consider the following issue: “• Whether the claimant was a worker ERA Whether the [claim] [complaint of ] should be dismissed because the claimant is not entitled to bring it if they were not a worker of the respondent as defined in section 230(3) of the Employment Rights Act 1996.” The OPH was conducted using CVP on 8 November 2023. The Claimant, Mr Virag, who is Hungarian, attended and gave evidence. The Tribunal was greatly assisted by Ms Fowler, who acted as interpreter. The Claimant was unrepresented but was assisted by his wife. The Respondent was represented by a Mr Ramsbottom, who is a litigation consultant. I heard evidence from Mr Marco Pires who is a director of the Respondent and its Business Manager. At the end of the hearing, I reserved my decision. Although the question listed for determination related on its face only to the Employment Rights Act 1996, it was clear that the Claimant was contending that he was owed holiday pay and that that might raise a question as to whether he was a worker for the purposes of the Working Time Regulations 1998. In the judgment below, therefore, I have also considered that question although a determination of whether the Claimant was a worker for the purposes of the 1996 Act would, in practice, inevitably determine the question for the purposes of the 1998 Regulations in any event. Findings of Fact Case No: 2305928/2021 3 7. The Claimant began to work for the Respondent in March 2021. He had previously been a driver for Amazon. He was, he accepted, an experienced delivery driver. Before starting to work with the Respondent he had a discussion with a Mr Paulo Pinto and the terms were outlined. There is a live dispute between the parties as to what the Claimant was told he would be paid. The Claimant says that he was to receive (by way of guarantee) £110 a day and that for every delivery he performed thereafter he would receive another pound. The Respondent’s case is that he was on what was, in effect, a piece rate of one pound for every delivery. In practice, the Claimant very often performed fewer than 110 deliveries a day and was, so far as it is possible to tell from the documents produced for the hearing, never paid a guarantee sum. The Claimant’s inability to earn at the level he believed he had been promised is the reason the working relationship broke down. 8. The Respondent put in evidence a document which it says is the contract that governed the working relationship. At the very top of the document there appears a date: 8 September 2021. That is almost six months after the Claimant began to work for the Respondent. At the very bottom of the document is another date: 21 February 2021, which is several weeks before the Claimant says he began to work for the Respondent. The Respondent says that the latter date is the correct one. The Claimant says that he only signed the document in September. Both parties agree, however, that the Claimant signed the document and neither of them suggests that there was any material change in how their relationship operated in practice in September 2021. The Claimant says that the terms of the contract do not reflect reality. 9. The document is headed, confusingly, “Sub Contractor” (which points away from employee status, but not necessarily worker status) but also “Contract of Service” (which points towards an employment relationship, “contract of service” being part of the definition of “contract of employment” at Employment Rights Act 1996, s. 239(2)) 10. As is commonplace, the terms appear to have been drafted with an eye on excluding the possibility of employee and/or worker status. There is the familiar clause recording an agreement that there should be no contract of employment: “24. Both parties consider and intend this agreement to be a contract for services and not a contract of employment. The sub-contractor is therefore responsible for making his own arrangements for payment of tax and national insurance, VAT, public liability and other insurances and pension. The sub-contractor will not be entitled to receive any company benefits at all (including sickness and holiday payments).” The clause could, of course, be consistent with worker status, as workers are engaged under a contract for services, albeit that the contract must be one pursuant to which the...