The Duck Test: Case Law from Across the Pond
It is no surprise that this blog regularly returns to the issue of misclassification of employees as independent contractors. Classification is something that employers often get wrong. Figuring out whether someone is an employee or independent contractor is sometimes referred to as “the duck test.” If it looks like a duck, quacks like a duck and walks like a duck, it is a duck – similarly, if a relationship has all the characteristics of employment, then the individual is probably an employee as a matter law, regardless of the label the parties put on it. A recent series of cases in the UK demonstrates how this same issue arises around the world, but sometimes with a twist.
A recent series of decisions by UK Employment Tribunals have ruled that individuals were wrongly classified as self-employed independent contractors. These include cases concerning Uber drivers, a plumber working for a firm called Pimlico Plumbers and couriers for the food delivery service Deliveroo. However, the courts also found these individuals were not employees, because they were sufficiently independent of the companies they worked for and otherwise failed to not satisfy the traditional employment “duck test”. Instead, they were held to be “workers.”
A “worker” under UK law is in an intermediate category between an employee and a genuine self-employed independent contractor. Workers benefit from certain rights that true independent contractors do not (such as the right to paid vacation and the national minimum wage), but they do not get all of the rights and benefits that employees enjoy (such as unfair dismissal protection and the right to a redundancy payment). Accordingly, the test for determining whether someone is a worker sets the bar lower than for employees.
Most employers in the US are familiar with the need to classify their workforce properly, but they should not forget to apply a similar analysis to individuals engaged to perform services abroad, taking into account the different approaches taken by foreign jurisdictions.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.