In the recent case of Dewhurst and others v Revisecatch t/a Ecourier and City Sprint, the Employment Tribunal ruled that "limb (b) workers" are covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), alongside traditional employees. Although Employment Tribunal judgments are not binding, this decision could potentially be very significant for employers.
"Limb (b) workers" are workers who do not work under an employment contract but who work under "any other contract...whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer."
This can include for example, those who:
- are registered as self-employed but who provide a service as part of someone else's business;
- carry out the work personally, rather than being able to send someone in their place; and
- do not have a contract with their own 'client' or 'customer', but with another party (for example, Uber drivers whose contract is with the Uber platform, rather than with their passengers).
These 'workers' are entitled to certain rights including paid holiday leave, National Minimum Wage and protection against unlawful discrimination. In this case, the 'limb (b) workers' were three cycle couriers who brought claims against the Respondents for holiday pay and failure to inform and consult under regulations 13 and 14 of TUPE in relation to a business transfer.
TUPE's purpose is to protect employees if the business or service provider in which they are employed, changes hands. Employers who fail to inform and consult employees in connection with a TUPE transfer may have to pay a penalty of up to 13 weeks' gross pay. The question for the Tribunal was whether these couriers, as 'limb (b) workers', fell within the TUPE definition of 'employee' for the purposes of being able to claim a protective award.
Under TUPE, an employee is 'any individual who works for another person, whether under a contract of service or apprenticeship or otherwise.' The Tribunal reasoned that the words 'or otherwise' were intended to grant protection to a broader class of employees than just those working under a contract of employment and therefore it included these 'limb (b) workers'.
Whilst this decision is not binding, it seems to be a reflection of a general trend of expanding rights for workers in the 'gig economy.' It is a decision that is likely to be appealed given the possible impact of this finding. If upheld on appeal, it will become binding and the implications will be important for employers managing TUPE processes. In the meantime, there is the prospect of 'limb (b) workers' who were not included in a TUPE consultation lodging protective claims which may then be stayed by the Tribunals pending the outcome of any appeal.
The Employment team at Edwin Coe will be following this matter closely and will keep you updated.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.