Challenging false self-employment




A string of recent tribunal claims has highlighted the spread of false self-employment, especially in the “gig economy”, by organisations looking to gain market advantage by escaping the need to comply with key statutory rights such as the National Minimum Wage, holiday pay, and the ability of workers to access the statutory union recognition regime (see Chapter 5). 



With union backing, tribunal claims have been pursued against key players in the gig economy, including transport service provider Uber, national logistics company UK Express, online retail giant Amazon, delivery firms DX and Hermes, Royal Mail Parcelforce, citySprint, Addison Lee, Excel and E-Courier. In addition, the Equality and Human Rights Commission won an important Supreme Court ruling on worker status in the case of Pimlico Plumbers v Smith [2018] UKSC 29.


Tribunals are expected to take a “realistic and worldly wise” approach to these cases, recognising the inequality of bargaining power and the take-it-or-leave it nature of any paperwork (Autoclenz v Belcher [2011] UKSC 41). Increasingly, tribunals also take particular note of marketing material that gives customers the impression of a directly employed workforce ready to provide services when called on, where that material contrasts with contractual documentation designed to look like “self-employment”. Good recent examples include Pimlico Plumbers Limited v Smith [2018] UKSC 29, Addison Lee Ltd v Gascoigne [2018] UKEAT/0289/17 and Uber v Aslam [2018] EWCA Civ 2748). 



High levels of monitoring and control (such as use of GPS tracking), branded uniforms and equipment and control of time schedules are also factors that point away from genuine self-employment. 



Similarly, prescriptive recruitment and induction processes and the use of sanctions such as temporary or permanent withdrawal of access to the source of work are also strong indicators that someone has worker status and is not genuinely self-employed (see box on page 35). For example, in Pimlico, the sanction for plumbers who broke rules such as the ban on working privately for PPL customers was “instant dismissal”. Uber also used passenger ratings to monitor drivers’ performance. Anyone who failed to make the grade after a series of “quality interventions“ had their account “deactivated”. In both cases, the individuals concerned were found to have “worker” status. They were not self-employed. 


Inequality of bargaining power is a key feature of these cases. In Uber, the tribunal condemned Uber’s use of “fictions, twisted language and even brand new terminology”, concluding that it was unreal to deny that Uber was in business as a supplier of transportation services and “faintly ridiculous” to describe Uber in London as a “mosaic of 30,000 small businesses linked by a common ‘platform”. The drivers, many of whose first language was not English, did not and could not negotiate as equals with Uber and were in no position to grow their business, “unless growing his business simply means spending more hours at the wheel” (Uber v Aslam [2018] EWCA Civ 2748). 




Workers engaged through false self-employment miss out on rights such as:


• paid sick leave;




• limits on working hours and holiday pay;




• overtime rates;




• redundancy pay;




• travel allowances;




• pension contributions (including pension auto-enrolment); 



• the ability to access statutory union recognition; and




• employment protections such as the right to claim unfair dismissal and protection from discrimination at work.




Employment status is not a matter of choice. It is a matter of law.