BCA drivers found to be workers at Employment Appeal Tribunal

The Employment Appeal Tribunal (“EAT”) has upheld a decision that 400+ drivers were considered ‘workers’ for the purposes of the Employment Rights Act 1996. The case centred around whether drivers engaged on a self-employed basis were in fact considered ‘workers’.

The drivers entered into a standard form contract on a self-employed basis to provide vehicle collection, inspection, delivery and transport services to BCA Logistics Ltd (“BCA”) on behalf of its customers. BCA engaged around 1,204 drivers on a self-employed basis and had done so for over 25 years.

In 2023, around 422 drivers brought claims that their wages had been subject to a series of unauthorised deductions and sought entitlement to national minimum wage and statutory holiday pay. The claims were dependent on the drivers being classified as ‘workers’ for employment rights purposes. The case was originally heard at the Employment Tribunal (“ET”), where it considered the facts of the case by looking at all the evidence and what occurred in practice. The key consideration being whether the ‘substitution’ clause contained within the contract was genuine.

It was concluded by the ET that the substitution clause was not genuine. There had been no consideration as to how substitution could actually work in practice - BCA had engaged self-employed drivers for over 25 years, yet drivers had never utilised a substitute. There was no training or guidance on how to engage or use a substitute. The reality was that any right was far too onerous and unrealistic for it to happen. It was found that any substitute would be required to attend a lengthy four-day training course, and there would have been practical difficulties relating to trade plates, insurance, data protection and equipment. The terms in the agreement with BCA customers also contained further restrictions. Overall, it was found to be “an unrealistic possibility that was not intended to be operated in practice and it therefore did not form part of the true agreement.”

It was concluded by the ET that the facts demonstrated the drivers were not carrying out business on their own account and therefore were in fact ‘workers’. BCA appealed the decision to the EAT.

BCA’s appeal grounds

The appeal to the EAT focused on two grounds relating to the evidence. BCA contended the evidence impacted the ET’s decision surrounding substitution.

The first ground was that the ET erred in law in assuming it was BCA’s responsibility to call for witnesses and therefore drew adverse inferences or conclusions from the “striking gap” from BCA not calling witnesses. The second ground for appeal was the ET erred in law in relation to authenticity of the substitution clause by disregarding evidence on the basis it was obtained after court proceedings started.

EAT hearing

On the first grounds, the EAT concluded that the “striking gap” was simply a “passing comment”, which was not inaccurate and did not influence the ET’s conclusion. The judge stated that BCA was alive to the fact that in advance of the ET hearing, the ET might be “surprised that the company did not call any current or recent drivers as witnesses”. This was supported by looking at Mr Dugmore’s (BCA employee) witness statement that pre-emptively provided an explanation and stated that individuals did not want to be witnesses for BCA out of “fear of backlash”, but did not further expand on how this reasoning came about.

The judge stated there was nowhere in the ET judgement to suggest the legal or evidential burden of proof was placed upon BCA and nowhere inferring this is what was done. It was clear that if BCA are arguing a point of substitution, they will want to provide witnesses that support their contention. Overall, on ground 1, the ET did not act unfairly and did not use the “striking gap” as a point to influence their conclusion.

On the second ground of appeal, the EAT concluded the ET set out the law “carefully and accurately” and was correct to find that the “evidence of recent interest in substitution on the part of the drivers was extremely thin”. There were two occasions substitution was enquired about by drivers, but neither of these utilised a substitute or attended the court proceedings to provide evidence. The ET stated they did not overlook the evidence or dismiss it but instead found it was not strong to support that drivers were genuinely interested or expecting to utilise a substitute. The EAT agreed with the ET and stated “BCAL may not be happy with this conclusion, but it does not contain an error of law. It was a legitimate conclusion for the ET to reach.”

It is unusual for the courts to place such emphasis or expand beyond a short summary on the credibility of witnesses but here the EAT made clear mention of the credibility of the witness statements which did not look favourably on BCA. They stated that the “reasons why the ET preferred the evidence of the Claimants over the evidence of Mr Dugmore and the other witnesses for BCA had nothing to do with the striking gap observation.” Rather, the EJ found claimants’ witnesses to be credible and their evidence to be consistent with the contemporaneous documents and with common sense.

What is the importance of this hearing?

Although this hearing was based on worker status rather than looking at self-employment, it provides important insight into the right of substitution and how it may be tested by courts. A genuine right of substitution supports a lack of personal service; therefore it is a fundamental consideration when looking at an individual’s employment status.

Merely by having the contractual right to substitute where, in reality, it is an “unrealistic possibility” (ET) may not suffice in demonstrating a true right of substitution and the written term “can be disregarded as forming no part of the true contract” (EAT).

This is an interesting case, as it provides commentary as to the ‘genuineness’ of substitution clauses and the importance of ensuring clauses reflect the practical realities of the day-to-day working practices as being equally as important as the written documentation.

Simply, a contract offers no protection if it is there to disguise the true intention of the engagement. The right of substitution must be unfettered, genuine and a real expectation that could possibly happen in practice with the processes in place to enable the right to be utilised.

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