HR · 13 January 2017

CitySprint gig economy ruling fires warning shot to employers

CitySprint
CitySprint employs around 3,500 self-employed workers

The decision to classify a courier working for delivery company CitySprint as a full-time employee has sent another warning to UK businesses employing self-employed and freelance workers on a full-time basis.

The Central London Employment Tribual has decided that CitySprint had incorrectly classified Maggie Dewhurst as a freelance worker. Subsequently, the company was ordered to provide Dewhurst with typical employment rights such as sick pay and annual leave.

The ruling represented the latest development in the scrutiny of the so-called “gig economy”.

Tribunal judge Joanna Wade stated that the relationship was “not a commercial venture between two corporate entities, as claimed by CitySprint.”

The ruling demonstrated the UK legal system’s commitment to enforcing a consistent approach to gig economy workers. The CitySprint case follows the victory of Uber drivers to be classified as full-time employees of the taxi app, entitling them to basic workplace rights.

CitySprint currently employs 3,500 “self-employed” couriers in Britain, and the ruling could shake up the ways in which similar companies operate.

Commenting on the impact of the ruling, Anna McCaffrey, an employment law expert at law firm Taylor Wessing, warned that now was the time for business owners dependent on self-employed workers to protect themselves.

“It’s not necessarily the end of the gig economy, but it does mean firms will have to review business structures. Companies that operate using similar models to Uber and CitySprint could be facing similar claims,” she said.

“[Business owners] will need to be confident that, if they have claims brought against them, they would be able to justify why the individual has a certain status if it was challenged legally.”

There are a number of outstanding legal challenges to other companies using self-employed workers, including Addison Lee and eCourier, due from March this year.

The six-month Taylor review into the gig economy began in December 2016, and is expected to form the basis of the government’s response to how companies use flexible employment.

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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