Newsletter January 2019


I am sorry that you have not heard from me with a Newsletter for a while, but the small matter of Christmas got in the way and in any event, other than the Uber case referred to below, there has been little of significance happening over the last few weeks (in the employment law world!).

Things will probably start to warm up as 2019 progresses, but for the time being you will have to make do with the few items of interest I refer to below, most of which relate to our old friend employment status.

Darryl Evans
T: +44 (0)7771 725341

Uber drivers again considered workers

The Court of Appeal has upheld, although only by a majority, the Employment Appeals Tribunal (EAT) decision that Uber drivers are workers and are therefore entitled to the national minimum wage and paid holiday, the main benefits of worker status. It also agreed with the original tribunal that the drivers were to be regarded as working during any period when they were within their territory, had the Uber app switched on and were ready and willing to accept trips.

Uber has argued that it only acts as an intermediary, providing booking and payment services, while the drivers provide services to passengers as independent contractors. However, the Court decided that Uber enters into contracts with passengers for the provision of driving services, which the drivers perform on Uber’s behalf. Uber, it concluded, is a transportation business and the drivers provide the skilled labour through which that business delivers its services and earns profits.

Despite the fact that the written contracts between the drivers and Uber state that Uber is an intermediary, the Court held that those contracts do not reflect the reality of the relationship between the drivers and Uber and so can be looked beyond.

However, one of the three judges found for Uber. Lord Justice Underhill felt that the arrangement was much like many other taxi booking services where the taxi company is an intermediary.

The Court gave permission to Uber to appeal to the Supreme Court, so this saga is not over yet. (Uber BV and others v Aslam and others 2018 EWCA Civ 2748.)

But Deliveroo riders are not….. least, in the context of the application by the Independent Workers’ Union of Great Britain to the High Court for a finding that the riders were entitled to be recognised for collective bargaining purposes.

In order to succeed they relied on the right to bargain collectively under Article 11 of the European Convention on Human Rights. If the drivers were at least workers, providing personal service, they would be covered.

The Union argued that this right to bargain collectively is an essential right under Article 11 and that UK law should be interpreted so as not to exclude individuals whose contracts do not technically satisfy the requirement of personal service. However, the Court rejected this, on the grounds that Article 11 rights did not extend outside an employment relationship and the riders were not in an employment relationship with Deliveroo.

The outcome is consistent with that of an earlier case, brought by Deliveroo drivers themselves, that they were not workers because they have an unfettered right to appoint a substitute on their behalf.

The Union has indicated (by a tweet, as it happens) its intention to appeal to the Court of Appeal.

Jess Varnish – worker, employee or neither?

Although this case was only at employment tribunal level, it achieved a level of publicity due to the fame of the claimant, the cyclist Jess Varnish.

You may have read that she made allegations of sex discrimination against the former British Cycling Technical Director, Shane Sutton, some of which were upheld. She was subsequently dropped from the British Cycling squad for the Rio Olympics and in light of that made claims of unfair dismissal, sex discrimination and detriment due to being a whistle-blower.

In order to succeed with those claims, she would need to show that she was an employee or worker of British Cycling or UK Sport, the governing body which provides funding to British Cycling. She relied on the level of funding and control exercised by British Cycling and UK Sport.

However, the two bodies both successfully argued that Ms Varnish was in receipt of a grant, similar to a university grant, and was free to train and prepare for Olympic events according to her own needs. Ms Varnish was neither an employee nor a worker and so she cannot pursue any claims unless she successfully appeals the decision.

The right to use a substitute and employee status?

Before we leave the issue of working status, I have one more decision to report.

Mrs Chatfeild (sic) - Roberts was a live-in carer for Ms Phillips’ uncle, apparently "an irascible old man". They were introduced by an agency, Universal Aunts. For the three years of the arrangement Mrs C-R was paid gross and took care of her tax and NICs. When the relationship ended she brought various claims. The tribunal first needed to decide if she was Ms Phillips’ employee.

The tribunal held that she was. There was mutuality of obligation and sufficient control over her.

On some occasions, Mrs C-R asked Universal Aunts to arrange a substitute, rather than providing a substitute herself. It was this issue of substitution which was the focus of the appeal. The EAT noted that substitution had only happened on her days off each week, for a period of jury service and for periods of annual leave (for which she had also been paid). It concluded, in line with the principle in the Pimlico Plumbers case, that the right of substitution only when a person is unable to work can still be consistent with personal performance. The finding of employee status was upheld. (Chatfeild (sic) – Roberts v Phillips and Universal Aunts Limited UKEAT/0049/18.)

Age discrimination - protection of older workers

In The Lord Chancellor v McCloud (2018 EWCA Civ 2844) the Court of Appeal made the (in my view, entirely commendable) decision that the protection of older workers can be a legitimate aim justifying age discrimination against younger workers, but only provided it is supported by proper tangible evidence.

The claimants were judges and firefighters who were affected by pension reforms. Pension scheme members who were near to retirement were allowed to remain members of the scheme, while younger members had to transfer to a less generous scheme.

This clearly amounted to age discrimination, so the question was whether it could be justified. The Court held that such justification is possible, if there is evidence of the potential for older members to suffer financial difficulties as a result of having less time to prepare for the impact of the changes.

Whistle-blowing - public interest

The original impact of the whistle-blowing legislation was lessened by the requirement that any protected disclosure must be made in the public interest, and that the claimant must have reasonably believed it to be so. The aim of that change was to remove from the protected disclosure rules matters which were in effect private disputes between employer and employee. Many employees (or their advisers) were alleging that once the employee raised a complaint of being treated unlawfully, any action which followed was a response to that whistle-blow, which meant the two year service rule and compensation cap for ordinary unfair dismissal did not apply.

In Ibrahim v HCA International Ltd (2018 UKEAT 0105/18) the EAT held that a hospital worker’s complaint to HR that he was being defamed by rumours that he had breached patient confidentiality was capable of amounting to a protected disclosure, as defamation was a legal breach. However, the disclosure ultimately was not protected as it was not being made in the public interest.

Mr Ibrahim said that the motivation behind his complaint was that he wished to clear his name and restore his reputation. When the hospital later dispensed with his services, he claimed that he had suffered a detriment for having made a protected disclosure.

The EAT decided that because his motivation for making the disclosure was specifically so that he could clear his name, the public interest element was lacking.

Burden of proof in discrimination cases

In August 2017 I reported the EAT's decision in Efobi v Royal Mail Group Ltd that claimants do not bear the initial burden of proof under section 136 of the Equality Act 2010. This seemed to reverse the well-established understanding that the onus is first on the claimant to show a ‘prima facie’ case of discrimination at which point the onus then shifts to the respondent to show discrimination played no part. The EAT’s decision was, therefore, something of a surprise.

Well, that’s how the Court of Appeal saw it too, so the EAT’s decision has been overturned and the original order is clearly restored. (Efobi v Royal Mail Group Limited 2019 EWCA Civ 18.)

Consultation on maternity laws

The government has published a consultation paper on the possible strengthening of the protection of mothers on maternity leave. Regulation 10 of the Maternity and Parental Leave etc Regulations 1999 provides that if a woman on maternity leave is selected for redundancy, she must be given priority over other redundant employees when the employer offers suitable alternative employment. The proposal is to extend this right to women who have returned from maternity leave in the previous six months.

The government is also considering going further and including women who have told their employer that they are pregnant and also those on adoption leave, shared parental leave and longer periods of parental leave.

Good Work Review

The Government has published a series of proposed changes to employment law, following the Matthew Taylor Good Work Review, which they have entirely inaccurately trumpeted as the biggest reform of employment law in 20 years.

In reality it is just a list of rather underwhelming proposals, with very little commitment to legislation. The main ones are:

  • changing the rules on continuity of employment, so that a break of up to four weeks (currently one week) between contracts will not interrupt continuity
  • extending the right to a written statement of terms and conditions to workers (as well as employees) and requiring the employer to give it on the first day of work (rather than within two months)
  • introducing statutory rules aimed at streamlining the employment status tests so they are the same for employment and tax purposes and to avoid employers misclassifying employees/workers as self-employed (not that this will avoid the difficulty in applying the test in any particular case)
  • a ban on employers making deductions from staff tips
  • increasing the penalty for employer's aggravating conduct from £5,000 to £20,000
  • abolishing the Swedish Derogation, which gives employers the ability to pay agency workers less than their own workers in certain circumstances

With regard to zero hours contracts, the only proposal is that employees will have a right to request a fixed working pattern after 26 weeks on a variable pattern. However, this will only be a right to request, and so is unlikely to have any sharp teeth.

See what I mean? Don’t bother the CEO with this is my advice.

The information and any commentary contained in this newsletter are for general information purposes only and do not constitute legal or any other type of professional advice. Darryl Evans and Evans Employment Law Limited do not accept any and, to the extent permitted by law, exclude all, liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. If you have a particular query or issue you are strongly advised to obtain specific, personal advice and not to rely on the information or comments in this newsletter.

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