If Employment Judge Joffe is correct, our current approach to the Transfer of Undertakings Regulations needs a complete re-think. She decided last week that three cycle couriers who had been engaged as non-employee workers were in principle entitled to invoke the protection of TUPE.
This decision, if confirmed on appeal, would represent a fundamental shift in the focus of TUPE, which up to now has been thought to apply to employees only. That understanding is consistent with the wording of the TUPE Regulations, which extend protection to employees but expressly exclude individuals working under a contract for services. But in recent years our courts have been increasingly willing to interpret domestic employment legislation broadly, to ensure that it aligns with the EU law it is designed to implement. This latest decision is perhaps the most extreme example of that to date.
Because it is a preliminary ruling, there is little in the way of factual background. But it is clear that the three claimants worked for Revisecatch until 31 January 2018, when it lost a contract with HCA Healthcare for the provision of courier services to Citi Sprint. Since then the three workers have been engaged by City Sprint. Subject to any appeal, this decision will open the way for these workers to argue that Revisecatch’s liability for unpaid holiday pay has transferred to City Sprint under TUPE. There is also a claim for failure to inform and consult.
Now that they have crossed the employment status hurdle, it is assumed that the three couriers will need to show that they can bring themselves within the definition of a service provision change under TUPE. To do that they would need to show that while working from Revise Catch they were assigned to an “organised grouping” of workers whose “principal purpose” was to carry out the contract for HCA Healthcare. That may not be easy to establish for a group of individuals working on what one assumes were typical gig economy terms.
Indeed, when one stands back and looks at the whole TUPE framework, it is hard to see how it can readily be applied to workers who have no employment security, and probably no entitlement to be given work on a regular basis either. The automatic transfer of employment and the preservation of existing terms and conditions following the transfer are the two key protections. How can these protections bite for workers who under domestic law can be engaged on a gig by gig basis?
It is true that there are many varieties of non-employee worker, and some are engaged on terms that have more in common with an employment relationship than others. However, it was agreed by all parties in this case that the question to be decided was an all or nothing point – either TUPE applied to all non-employee workers or it applied to none.
As a first instance decision, this ruling will not bind other employment tribunals and for a definitive answer we will need to wait for an appeal, either in this case or in one of the other employment status cases that are working their way through the system. However, it will give many employers pause for thought, particularly when competing for work with other businesses who may have mis-categorised their workers as self-employed, and hence may be facing significant claims for back-dated holiday pay.