03 December 2019

Yes, according to the decision of an employment tribunal sitting in London in Dewhurst & others v (1) Revisecatch & (2) City Sprint, in another example of the courts being asked to apply employment laws to the world of the “gig” economy.

Mr Dewhurst and the two other claimants were cycle couriers. They brought claims in the employment tribunal for, amongst other things, holiday pay under the Working Time Regulations 1998 and an award for failure to inform and consult under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Revisecatch and City Sprint are courier companies which engaged the services of the three claimants.

In earlier employment tribunal proceedings Mr Dewhurst was found to be a worker of City Sprint under the Working Time Regulations 1998. He was therefore entitled to holiday pay.

Subsequently, City Sprint lost the outsourced courier services contract under which Mr Dewhurst was engaged and the contract was awarded to Revisecatch.

For liability for the holiday pay claims to have passed to Revisecatch under TUPE, Mr Dewhurst and his two colleagues would have to be “employees” within the meaning of regulation 2(1) of TUPE. Likewise for the employment tribunal to be entitled to hear claims for failure to inform and consult under TUPE, Mr Dewhurst and his two colleagues would have to be “employees” within the meaning of regulation 2(1) of TUPE.

The legal position prior to this decision was that although individuals could be workers under section 230(3)(b) of the Employment Rights Act 1996, such that they had entitlement to certain rights including holiday pay, they were not what we might call “traditional employees” who had the protection of TUPE.

However, the employment tribunal has now held that these workers (commonly known as “limb b workers”) should also be protected under TUPE. The reasoning is that that the definition of “employee” in TUPE is "an individual who works for another person whether under a contract of service or apprenticeship or otherwise..." The words 'or otherwise' must be taken to add something to the normal definition of “employee”, and hence covers what are commonly known as “limb b workers”.

This case is an employment tribunal decision only. It is likely to be subject to appeal by both Revisecatch and City Sprint. However, if the decision is confirmed on appeal it could have far-reaching effects both for the sale of businesses to which TUPE applies and where the service provision changes under TUPE apply in outsourcing arrangements.

In the meantime, if you are the purchaser of a business or involved in outsourcing arrangements to which TUPE may apply, you should consider seeking an indemnity from appropriate parties for any TUPE claims that might arise from “limb b workers”. Otherwise, you could face expensive claims both for historical liabilities for workers which have transferred to you and a failure to comply with TUPE information and consultation obligations.

Contacts:

Caroline Carr, Partner: cac@bto.co.uk / 0141 221 8012