Tribunal decision that drivers were workers is upheld

In BCA Logistics Ltd v Parker [2025] EAT 94, the Employment Appeal Tribunal upheld a tribunal decision that hundreds of drivers for a vehicle delivery and inspection company were workers. The substitution clause in their contracts was not genuine, because not only was it never used, but nobody seriously expected it to be used.

The significance of substitution clauses in contracts has come under increased scrutiny by the courts and tribunals in recent years. In Independent Workers Union of Great Britain (IWGB) v Central Arbitration Committee [2023] UKSC 43, the Supreme Court confirmed that a substitution clause will negate the "personal service" obligation essential for worker status, even if has been put into the contract specifically for that purpose, provided the right to appoint a substitute is "genuine".

This case illustrates well the established principles regarding the approach tribunals should take to determine whether a substitution clause is genuine.

The Employment Appeal Tribunal acknowledged that the question is not whether the individual chooses to provide personal service, but whether they are obliged to do so under the terms of the contract as properly construed. However, the fact that no worker in 25 years before the start of the litigation had ever used a substitute was clearly a strong indicator that the option was never realistically intended to be used.

This can be compared to the facts in the IWGB case, where there was evidence that the "virtually unfettered" right of substitution had in fact been used by Deliveroo riders in some cases, that there was no policing by Deliveroo of a rider's use of a substitute, and riders would not be criticised or sanctioned for using a substitute. The other factors distinguishing IWGB from the present case are largely matters of degree: the practicalities of contracting a substitute in IWGB (the need for Deliveroo riders to share their phone or login credentials with the substitute) were clearly not seen as a barrier in practice, whereas there was seemingly no process at BCAL for dealing with issues such as the provision of equipment, trade plates, ID badges and insurance to BCAL substitute drivers. Likewise, the risk of allowing unknown, untrained individuals to deliver food to consumers was seen by the Central Arbitration Committee in IWGB as a matter on which Deliveroo could reasonably take a commercial view. However, in the instant case, it was held to be "unrealistic" that BCAL would accept the commercial risk of allowing unknown and untrained individuals to carry out inspection and delivery of high-value vehicles to business customers in the automotive industry, and this was a factor which led the tribunal to conclude that the substitution clause was not genuinely expected to be used.