UK Mail Ltd v Creasey

A person is not a limb (b) worker under section 230(3)(b) of the Employment Rights Act 1996 where the contract gives an unfettered and genuine right to have the services performed by another. Conditions governing a substitute’s qualifications, security clearance or suitability do not fetter the individual’s right to delegate where delegation may occur at any time, for any reason or none.

The contractual right remains effective although it is unknown to the individual or is never exercised. Practical performance cannot displace a genuine written term unless the evidence establishes that the term is a sham or does not represent the parties’ true obligations.

The Respondent appealed from a preliminary hearing judgment of an Employment Judge which held that Mr Creasey, a delivery driver engaged under a subcontractors’ agreement, was a worker but not an employee.

The agreement permitted him to provide the delivery services through approved personnel. Approval was directed to the substitute’s qualifications, driving entitlement and security suitability. Mr Creasey did not know of the clause and had never used a substitute, although some other drivers had done so.

The central issue was whether this contractual substitution right was inconsistent with an undertaking to perform work personally within section 230(3)(b) of the Employment Rights Act 1996.

1. Appeal allowed. The Employment Judge erred in holding that the Claimant was a limb (b) worker. His claims were dismissed.
2. The decisive issue was the construction of the subcontractors’ agreement. Read as a whole, it imposed a composite obligation: the Claimant could perform the services himself or arrange for them to be performed by his personnel. The agreement gave him a genuine and unfettered choice to use an alternative provider.
3. The requirements that personnel be approved and possess appropriate qualifications, licences and security clearance were conditions imposed on the proposed substitute. They did not restrict the Claimant’s right to delegate. Unlike cases in which substitution depended upon inability, sickness or another specified event, he could choose not to perform personally for any reason or none.
4. The Judge had found that the substitution term was genuine. The Claimant’s ignorance of it, its non-use over many years, and the fact that he usually performed the work himself did not alter its legal effect. There was therefore no basis for treating the term as a sham under Autoclenz, and the ordinary consequence of his signature remained effective.
5. The Respondent’s proposed argument that the Claimant operated a business undertaking whose customer was the Respondent was a new point. It had not been raised below and would have required further findings. The Tribunal refused permission to raise it. That did not affect the result because the absence of a personal-service obligation defeated worker status at the earlier stage of section 230(3)(b).

• Employment Appeal Tribunal: appeal allowed; the preliminary finding that the Claimant was a worker was set aside and his claims were dismissed.
• Employment Tribunal: Employment Judge Goodrich, by reserved reasons sent on 19 January 2012, held that the Claimant was not an employee but was a worker.