Worker or Independent Contractor? European Court of Justice Guidance
The vexed distinction between 'workers' and 'independent contractors' could hardly be more important for many businesses but remains perennially controversial. An important ruling of the Court of Justice of the European Union (CJEU) is likely, however, to prove invaluable in shedding light on the issue (B v Yodel Delivery Network Ltd).
The case concerned a neighbourhood courier who provided his services exclusively to a UK-wide parcel delivery company. In Employment Tribunal (ET) proceedings, he alleged breaches by the company of the Working Time Directive. That claim could only be entertained if he was a worker and, given its uncertainty as to whether he enjoyed that status, the ET sought a preliminary ruling from the CJEU.
The courier accepted that he was self-employed for tax purposes, and accounted for his own business expenses, but argued that that did not preclude him from being a worker. His agreement with the company stated in terms that he was an independent contractor. He was not required to perform deliveries personally and was entitled to delegate his role to a suitably qualified subcontractor or substitute.
He used his own vehicle to make deliveries and communicated with the company using his own mobile phone. Within certain parameters, it was for him to choose when he provided his services. He was free to perform concurrent delivery services for third parties, including the company's competitors. The company was not required to use his services, but he in turn enjoyed an absolute right to refuse jobs.
Giving guidance on the issue, the CJEU noted that his freedom to use substitutes or subcontractors was a powerful indication that he was not a worker. Given the high degree of latitude and discretion he enjoyed in choosing the time, place and conduct of his work, his classification as an independent contractor was not, on the face of it, merely notional or fictional. His relationship to the company also did not appear to be one of subordination. The case was sent back to the ET for resolution in the light of the CJEU's ruling.