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Employment Status Called Into Question Again with Potential Claim Against Amazon

on Friday, 22 October 2021.

Amazon may have to pay millions in compensation in response to a potential claim being brought against them by third party delivery drivers, arguing for the same rights as employees.

A Background of the Case

A potential group action by drivers hired by third-party delivery companies is seeking to bring a claim against Amazon over employment rights. The delivery drivers are currently classed as self-employed which means that they are not entitled to provisions such as national minimum wage or holiday pay.

The drivers are arguing that, as Amazon give drivers estimated timings between deliveries on an app that they are expected to meet, set their shifts for them and require them to book time off, Amazon have significant control over their working practices and so the drivers should be provided with either worker or employee status.

The issues in this instance are not too dissimilar to those which were raised by Uber drivers in a case which ended up at the Supreme Court. We reported on the decision of the Supreme Court which determined that the drivers were workers.

There are various factors which will be considered to determine whether an individual is classed as self-employed, a worker or an employee which we have outlined below.

Relevant Factors When Determining Employment Status

  • The written terms between the parties - employees and workers will generally have a contract with the employer however, as confirmed in the Uber case, a contract may not necessarily reflect the reality of the situation, regardless of what it might say.
  • Personal Service - a requirement to personally perform the work or services will generally be more indicative of worker or employee status, but if there is an option to appoint a substitute, then this is more likely to suggest that the individual is genuinely self-employed.
  • Mutuality of Obligation - is the employer obliged to provide work, and is the individual required to accept it? If so, then the individual may be an employee.
  • Degree of Control - where an employer exercises a higher degree of control over what a person does, how they do it and even when they do it, this will be a factor tending towards worker or employment status.    

What Should Employers Be Aware Of?

Whether an individual is an employee, worker or self-employed will depend on some or all of the above factors. However, as was confirmed by the Supreme Court in the Uber case, the presence of one of these factors does not necessarily mean that the individual will be an employee. Instead, a thorough examination of the individual's working practices and relationship with the employer will be necessary to determine their status.

While workers do not enjoy the full benefits of employees, they are entitled to paid annual leave and protection against unlawful discrimination amongst other things. Employers who operate their businesses by using self-employed staff will need to be careful to ensure that their working arrangements reflect this in practice. In the case concerning Amazon, if the drivers are successful in their claim, Amazon might have to pay millions in compensation.

If you require further information on the above or advice on the employment status of your staff, please contact Zahra Gulamhusein in our Employment Law team on 01923 919 300, or complete the form below.

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