The Court of Justice of the European Union (CJEU) has indicated in B v Yodel Delivery Network Ltd that a delivery driver whose contract allowed him to appoint a substitute and who was not in a relationship of subordination to the company (provided that was what happened in reality) was not a worker and could not therefore claim holiday pay under the Working Time Directive.
After signing a services agreement which stipulated that he was a self-employed independent contractor, B started work as a Yodel delivery driver. The agreement said he could appoint a substitute as long as they had the same level of skills and qualifications as him. He also had the right to work for other companies.
The agreement stipulated that Yodel did not have to use B’s services, nor did B have to accept parcels for delivery. If he did, the company required him to deliver them between certain times each week, although he could decide on the number of parcels he wanted to deliver as well as the route he wanted to use.
B lodged a tribunal claim arguing that he was a worker for the purposes of the Working Time Directive and therefore entitled to holiday pay.
The tribunal held that, under UK law, worker status presupposes that the person has to personally carry out the work or service. Likewise, it is incompatible with the right to provide services to several customers simultaneously. As such, Yodel couriers could not be workers.
However, in case UK law was not compatible with the Working Time Directive on this point, the tribunal asked the CJEU to clarify the issue.
Decision of CJEU
Noting that although the directive did not define the concept of a “worker”, the CJEU made clear that it had a specific meaning within EU law. Firstly, this includes the requirement that, for a certain period of time a person carries out work for and under the direction of another person for which they are paid. Secondly, just because someone is classified as an independent contractor under national law does not mean they cannot be classified as an employee under EU law.
The Working Time Directive, on the other hand, has to be interpreted as precluding a self-employed contractor from being classified as a worker if they have a discretion:
- to use substitutes and perform work;
- to accept or refuse tasks offered by the organisation in question and can unilaterally set a maximum number of tasks;
- to provide services to a third-party including competitors; and
- to fix their own hours of work, albeit within certain parameters.
That is, as long as the contractor’s independence is real and not fictitious and they do not have a subordinate relationship with their alleged employer.
As such and in order to provide the tribunal with a “useful answer”, the CJEU said that it should bear in mind the following points when considering whether B was a worker:
- the degree of latitude that he had when exercising his discretion and whether it was real or purely notional;
- the extent to which B was in a subordinate relationship to Yodel;
- the extent to which Yodel could exercise control over his choice of substitute;
- B’s absolute right to refuse to do tasks and his right to set a binding limit on the number of tasks he was prepared to do;
- B’s right to provide similar services to third parties; and
- the requirement imposed on B by Yodel to deliver parcels at certain times.
As B’s independence as a courier seemed to be real and his relationship with Yodel did not seem to be one of subordination, the CJEU did not think that B could be a worker although it was for the tribunal to make the final deliberation.
By giving a reasoned opinion the CJEU has given a ruling which reflects the existing law on worker status. It does not address whether a worker who is defined by their contractual rights is compatible with EU law.