Written evidence from Helen Goodman MP (WOW0105)
Table of Contents
Summary Appendices: Appendix 1: Expert Logistics Delivery Driver Statements Appendix 2: Expert Logistics Example Contract Appendix 3: Fines Schedules Appendix 4: Similarity with other tribunal cases Appendix 5: AO World and Expert Logistics Employee Statements Appendix 6: Statements from AO World Annual Report Appendix 7: AO World Confirmation Statement
SUMMARY
This submission concerns a group of workers who are being exploited and highlights issues relevant to the questions concerning the status and rights of the self-employed; the balance of benefits between the worker and employer; the protection of these workers; the evidence of unfair treatment; the use of zero-hour contracts and the role of trade unions.
Workers from AO World’s subsidiary company, Expert Logistics came to see me following the court ruling on Aslam, Farrar, and Others v Uber. AO World plc is an online retailer (ao.com) specialising in household appliances. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. The logistics arm of the company is run by Expert Logistics which is a fully owned subsidiary of AO World. Expert Logistics provide 2 man home delivery crews 7 days a week, 7am to 7pm to deliver products for ao.com and more recently expanded to other companies including Next, Currys, John Lewis and Argos1. The goods are sent from the main warehouse at Crewe to 10 bases (locally this is Spennymoor) and the goods are then delivered to the customer’s home.
The drivers are classified as self-employed, but this does not appear to be the reality. Furthermore there is a culture of bullying and inconsistent health & safety requirements. Drivers are threatened with legal action if they complain about the fee reductions or excess damage payments. Expert Logistics know that drivers cannot afford to pay tribunal and small claims court fees. Whilst drivers are fined and sent home if they forget their boots or hi-vis clothing there are no safety nets in the Spennymoor depot and drivers have been injured by falling delivery items.
The fundamental business model used by AO World is to offload the financial risk onto the worker – in this case the delivery drivers. Any disputes with the customer, damage to the truck or delivery item are charged to the delivery driver regardless of who is at fault. There is a £3,000 excess on any damages to the vehicles and this is payable by the delivery driver not Expert Logistics. So for example, when a falling tree hit an Expert Logistics truck last year the driver was considered liable for paying the £3,000 insurance costs despite not being at fault – he will work for 365 hours just to pay this bill. The economic theory is the profits go to the one who bears the financial risk: in AO World the shareholders receive the profits and the workers bear the risk.
By designating the drivers as self-employed, AO makes it impossible to secure trade union recognition. By treating them as self-employed AO World gets round all employment protection legislation; payment of the minimum wage and statutory entitlements to holiday, sick and maternity pay, and pension contributions.
The difference between the public statements made by the company and the treatment of their workers is stark. The system of arbitrary fines is akin to that used in privately owned mines at the end of the nineteenth century.
Reasons why the classification of self-employment should be challenged:
• Expert Logistics sets the daily route and the drivers are not paid any extra if the route takes longer than the set hours predicted by Expert Logistics.
1 Expert Logistics deliver to buildings which Argos drivers refuse to deliver e.g. flats • The delivery drivers have to wear a set uniform2 and use branded vans owned by Expert Logistics.3 • Expert Logistics imposes strict conditions4 on drivers and fines for non-delivery, torn labels, incorrect codes et cetera.5 • In the 2 man crews, one is designated as Crew Leader, and he receives the full pay for both drivers minus any fee reductions, and is responsible for passing on the wages to their assigned crew mate. • Contrary to Section 7 of the Contract the driver cannot provide an alternative driver if they are unable to work and they are assigned a crew mate – they have no option who they work with. Expert Logistics assign another driver and charge a fee for non-attendance (even if sick). In Spennymoor a driver who falls ill during a shift is charged £50; in Slough it is £150. • Invoices are generated by Expert Logistics not the driver. • AO World/Expert Logistics determines complaints by the customers. The driver is asked for a statement but there is no investigation to check the veracity of the customer’s claim. It is rare that the damage costs are not passed on to the driver. • Drivers who work for RFG Greatholder & Sons (sub-contractor to Expert Logistics) are not allowed to be employed by Expert Logistics due to a “gentleman’s agreement”. This is contrary to the contractual term stating that drivers are free to provide services to any third party.6 • Expert Logistics frequently use the full legal hours a driver can work, making any alternative employment impossible.
March 2017
2 Appendix 2: Example Contract: Section 6
3 Appendix 2: Example Contract: Section 11
4 Appendix 2: Example Contracts: Examples Sections 15, 17 and 23.
5 Appendix 3: Fines Schedule
6 Appendix 2: Example Contract: Section 3 Appendix 1: Delivery Driver Statements on Export Logistics
Driver A:
“I have had a driver phone me today regarding an accident that his team mate had (He wasn't even in the truck at the time!!!). He has been told to pay half the damages or get effectively fired. He has also been told that if the other driver refuses to pay or leaves, he will be responsible for the entire amount.” “The hourly rate offered is misleading as that rate is per two man crew. So it works out to £9.00(weekdays) - £10.25(weekends) per hour per person. But what they do not tell you is that you are given a fixed amount hours per route you do. So, if you are given 10 hours to do a route and it takes you 11 hours you will still get paid for only 10 hours. Okay there is a flip side, if you do the route in 9 hours you will still be paid for 10 hours, but that is rare. Also, what they do not tell you is that you have an excess of £3000.00 if you have an accident or for any damage claims against you. The excess is taken at 10% of your team weekly wages until paid in full. In effect a person could lose up to 20% of his weekly wages, so that £9.00 per can easily become £7.20 per hour!!
At Spennymoor depot the 3.5 ton drivers are paid at £8.25 per hour weekdays and £9.25 per hour at the weekends and bank holidays. Any damages to be paid back can therefore take you below the minimum wage. Of course if you work for Ray [Greatholder & Sons] you only get £7.00. Sorry this is long winded reply, but the only way I can explain it all. Also to add, drivers do not get sick pay, holiday etc. which employees in the offices of Expert logistics/AO.com do get. I must also add that 7.5ton drivers get an extra £1.00 per hour above the 3.5 ton rates.
“One of the drivers was charged £670 to replace a new floor. The large American fridge had caused a tiny tear in the carpet but there was already substantial damage to the floor – there was nails sticking through it.”
In response to John Roberts’ quote (“For example, in our depot, we have a guy who is responsible for putting two bottles of water in each delivery lorry. It's a small detail, but it makes our drivers happy and feel valued.”)
“With regards to water, there is water at the depot. You have to ask for it (not always available). Now and again you do get cans of fizzy drinks. But no there is not a member of staff who puts two bottles in each truck.”
“I have had another driver phone me today regarding an accident that his team mate had. He has been told to pay half the damages or get effectively fired. He has also been told that if the other driver refuses to pay or leaves, he will be responsible for the entire amount. I talked to the manager to say that this wasn’t fair and he told me something interesting. They pay a solicitors firm a monthly fee of thousands of pounds to make sure they stay “just within the law” and that no one has won in court against them (drivers taking Expert to court). The solicitors say they guarantee a win in any court case the solicitors firm is liable for the cost. They [Expert Logistics] don’t pursue damages in a court when drivers leave as they know it would get thrown out of court. They know if they lost one case the whole rotten system would collapse.
Spennymoor Delivery Driver Statement
Mr A was billed £3000.00 for damage done to the truck he was driving when it was struck by a falling tree. He has been paying off the damage for over a year now at 5% of his wages. Again told that he either pays for the damage or loses his job, even though it was not his fault!! He had already passed the tree when it fell over striking the box of the van but was billed for the damage to the truck even though he was delivering for Expert Logistics. The farmer who owned the land refused to admit to any fault as well. When he protested about the bill, he was told by the manager that it was tax deductible.
Former delivery driver and Training Officer
We were regularly sent to London to deliver training. Travel expenses (time travelling and fuel) were not paid and although we were reimbursed for hotels there could be a delay of weeks – which is a long time to wait when paying for expensive hotels in London. So we were just paid for the hours spent training but we could spend as much time again travelling. Often because we weren’t paid for the full hours we were away from home we ended up driving to London, sleeping in the truck for a couple of hours, delivering 12 hours of training and driving back to the North East.
Ex-driver
Damage was caused to my truck due to the floods – the manager told me “just take the hit” – The hit was £1200 and it wasn’t even my fault. There should be a built in company insurance – why are we taking the risk when we aren’t getting paid enough to begin with.
Current driver
I’ve worked there for 4 years and we had a slight pay rise since the Uber case – they are obviously trying to stop us wanting to take them to court too. It’s not fair as the office staff get holiday, sick pay – its discrimination as its men who aren’t getting those benefits yet we are the ones most likely to be hurt. There is a low volume of calls at the moment – I am only getting two days so it’s a struggle supporting a family and paying a mortgage. I can’t get another job though as I have to be available or I will lose this one. If you say you cannot work a particular day they won’t offer you any work for at least a week afterwards.
Another delivery driver
We work in two man teams. One person is considered to be the crew leader and is paid by Expert logistics for work done. The crew leader then pays his crew mate from this payment. All damages, fines etc. are charged to crew leader. It is Expert Logistics/AO way of distancing themselves from any damages. In this case the crew leader did not have a partner at the time to work with, but was assigned another person to work with by Expert logistics. This person was from a different crew number - His partner (crew leader) was off work after hurting his back. No sick pay I must add. Unfortunately, this crew member had an accident whilst working on the Crew Leader’s number. The Crew Leader was not even in the truck when the accident occurred but has been charged a bill of £967.04. This amount will be taken off of the Crew Leader’s wages before it get to his bank account. The Crew Leader has been told that he has to pursue the other driver for the amount owing. Also as he is self-employed it is not Expert logistics problem. The Crew Leader has also been told, that if he refuses to pay he will lose his job!!!
Unfortunately, the Crew Leader cannot afford to lose 10% wages every week and is starting a new job next week. He has effectively been constructively dismissed. Believe or not the driver who had the accident has gotten away without paying the damages, as the Crew Leader has left. The damages stay with the Crew Leader’s crew number which is his crew number. Strangely, Expert Logistics will not be pursuing the Crew Leader legally.
This is something that happens all the time at Expert Logistics. Glassdoor Employee Review
Doesn't Recommend Negative Outlook
Pros Its a job thats about it
Cons Crap wage, really really long hours 'Mlich you are not paid for , if a route takes 14 hours to actually do and they say you can do it in 8hrs 40 min you get paid for 8hrs 40 min. At Heyv,..,ood Depot you have to unload all old appliances at end of a morning run and afternoon run, 'Mlich they say you are getting paid for. Strange how at crew, you just leave the van full and they do it. But you get the same rate. You get told your working at 11 pm at night by text then they cancel it. You are forced to 1MJrk 4 TRAINING days , where nobody trains anyone, the TRAINER just wants the work done as quickly as possible, sometimes you can 1MJrk 12+ hour days and during training you receive the princely sum of £60 a day, how anyone on here can call this company a good place to work is unbelievable , it must be management leaving good reviews as it can't possibly be the drivers. The throughput of drivers is unbelievable too. If you fail to appear for work they fine you £50 and stand you down for four days, the four days happen to always coincide with the training days, so they have plenty of cheap labour to replace you, you are forced to take on the responsibility of paying your co drivers wages, all i \.Vas informed \.Vas that i was a lead driver and he was the co driver, wasnt till we got paid that i understood that he worked for me not them, absolute joke. Another way of getting yourself into trouble with the tax man and laziness on Expert logistics part as they cant be bothered to do both the 'Nages. If you \NOrk for this company you will regret it, i know i did. Show Less
Advice to Management Stop lying to everyone
2/13/2017 E,pertlogislics Rel.ie.o.s I Glassdoor.co.uk you to-ask ydu to nip Birmingham to just "pick a few drops up" as another crew I'd behind but if you do it your only getting in around 9pm after starting around 4.30am but not getting paid the full hours your out, but if you say no the office they are funny with you so you better say good bye to your next few days work. The manger is a joke after emailing him asking why so many shifts are getting cancelled I've got bills to pay I can't afford to keep having time off only work 2- 3 days a week, he replied with just I'll take it you've quit then .... No explanation so that sums up how professionally its run so after that I quit, not being treated like a mug. So all that summed up ... Long days, no respect and do anything to take money off you, most truthful review about expert logistics on here. Show Less
Advice to Management At least show some respect to your drivers that are out for over 12 hours a day. If you charge drivers for vehicle damaged let them know, you did do for the 1st month I was there but after that I only found out in my pay slip that money was constantly coming out. Also when cancelling crews shifts 'Nhy do you not let the driver know instead of just not texting them a time to be in even though you said the morning before they'll be working ? Give them a reason why they 'i\/On't be earning money that day. Show Less
Helpful (3)
2/13/2017 8q)ert Logistics Re-.iew.. I Glassdoor.co.uk
Pros There is no pros to this company they use you up and chuck you out ! Have no concern for your health of safety . And talk and treat you like crap .
Cons Over vvork you under pay you , treat you like crap on a daily basis , don't care for you safety or health ,if you don't dance too there tune out the door you go , best thing I've done in this company was to leave .
Advice to Management Stay safe, be cause the way you treat your staff 'Nill and is going to get you into a lot of trouble . Best advice is get yourself some training in how to respect your staff.
Helpful (1)
Ray Greatholder & Sons case study (RG&S)
AO.COM
RG&S provide two team drivers for Expert Logistics (EL) (sub-contractor)
Key issues:
Pay
• Lower pay rate than the contractor (EL)
RG&S - £7.50ph Expert Logistic drivers £8.97ph
• Working for less than national living wage as drivers are not paid for hours they work over the set hours so if a delivery takes longer than RG&S estimate it is unpaid (e.g. frequently time taken to reach properties or to deliver goods is incorrect).
• Unfair clause preventing drivers from approach EL direct. RG&S have a ‘gentleman’s agreement’ that drivers working for RG&S will not be employed directly by EL if they leave RG&S. This means that they are stuck earning a lower wage for the same role.
• Drivers have to be available for shifts and therefore cannot take on work elsewhere – but are not guaranteed a set number of shifts – difficult to manage bills/rent or apply for tax credits/universal credit.
Deductions from pay
• No proof of costs justifying the reduction is provided
• Once one ‘fine’ is paid another is added to keep people working for them in order to pay their ‘debts’
• Lack of information on the deductions from the pay (e.g. invoice just shows a code and the amount deducted)
• Told that the deduction is 10% but it is frequently up to 20%
Accidents
In his first week he hit a car and was charged bill of £606 – this was repaid by deductions from his pay. Then he was given a second £913 bill for same incident – when he queried this he was then told that £606 was the cost of the hire car and the £913 bill for the repairs.
Recently his van skidded on the ice into a ditch on a steep hill – he was injured and caused damage to the van. He tried to claim ‘pay replacement’ through the insurance and was told that he had to be sick for two weeks before he could claim. He has paid £10pm for the insurance with no details of the policy. He could not afford two weeks without pay and therefore had to return to work injured.
Threatening text messages
When he requested information about the deductions and suggested that he would visit a solicitor her was sent the following text message.
Attached: Copy of ‘invoices’ showing deductions and no information on why the deductions are made. V'MS!(oS:1~0 RfCl!IVED 2 FEB 2017 o ~~~~~~~- ~ etGT-35-=t StOiieacre Motor Group
SIDitG
· . · ;':~~;!..C<,lo'U1/Trr,. -:.~.:;:,::;·:~t4 : ~;·,:, J~~t~!1~~;·r;•~°'i.~1·:;.:.:~/9att Lai'tY&&H· ::·.·;~~-.. ·,'.?,:;Date1'1 :-t·.. .\':i:~ f'·,(;.0-litt't,U,·eut:·.. 1.r: :;{;J°:~i.lini'Dui~ L__ 81110 I _ _· - --- l 7~0~~ ?_ 25/01/2011 o , oo
.:·;.,:-· :·,., ·!ii:i;YI!·;.;:;.: • iiii&~,Se".'•~·,'.;;,!_ ··.~,:,/•·:.-. •;;,.:·.:, · :{:',;, ··'· 1""itll'"Gl:ll:',,,. V • •• ,.,. •,'-'•' · • . ~·· },,~ •· ct)'r,;'.1..1' ••~~ ..... - ••Pf~ Y . ';'.'!'!~ ;'~ •"'· .~ 1 " , · · ··•.,\°' ,,.1 •• ,1. , ,·1i,.,'r,•'7~t;oi;·,,,,.;.,.i;1r J~,,...,...1.1n1t~fii, 1, ... i'"'li•lt.~.nl( ,~1-·~;lliii!i...... :.... · · ·~~;,~'A ill)I • • r BOD Bodywork rapair aa per •~tiaate J.>6M •a~nt, materials BJIA Zo'11.l:onmental Charg• CJI.R CAil CAllll! 11:X:'l' SUN 22. ,0 S ~ecb &Dd data methods Z801l140rroooo BEAK ra BUMPER R l.00 12.89 EACB 0.00 12. 89 S X ZR07119!tr0901 99ACER l1'R. BIJIU>ER l.00 14.21 EJU:8 0.00 l.4,21. Z80'1110!ff0G21 l . 00 o.oo X GRILLE FR BOMPEa 47.21 JG.Ca "' .21 $ X ZB014100fP2000 WIW; R l.00 49 . 78 El CD. V rr'\S l bS7C,.,6 IZX P7. /7- /- 17 Appendix 2: Example Contract 9) In order c.o ensure satisfaction for Expert's cust0mers and following a req,esr by Expert to proYide services which you have accepted, if you are unable to pn:lMde those services {whemer by reason of illness/injury of yourself or third parties or otilenorise . you must give as much notice as possible. Should Expert incur additional costs as a restit of your failure to A provide services that have been agreed, we reserve the right to seek cor.;pe:r.s:a.tion from ll you. I 0) It is agreed that you are not an employee of Expert and will be responsible for n-.aki.ng the appropriate PAYE deductions for tax: and national insurance contributions from the money which you pay to other crew members together with your own income taX deductions and national insurance. You agree to indemnify Expert in respect of any claims that may be made by HM Revenue and Cuscoms for any f.ailure to do so. 11) You will be provided with a fully fuelled Expert: delivery vehicle to carry out your deliveries. Expert agrees to pay you for each daily route which is calculated using the rate for each depot. This amount will be agreed at the time of Expert requesting the provision of services, but is subject to adjustment under clause 18. Expert operaces a self-billing procedure under which it will endeavour to make payment to you by the Monday of the week following the week in which the relevant delivery is completed. You agree co enter a self-billing agreement in such form as Expert requires from time to time. The current forms required are at Appendix I if VAT registered or Appendix 2 if not VAT registered. lffurther expenses are incurred or additional services are carried otrt on behalf of Expert men a Additional Payment Claim Sheet (Appendix 3) will need to be completed and submitted before a payment is made and payment will only be made if the expenses or additional services have been authorised in advance by the transport or an outbase manager. We will deduct a deposit of £100 which will be taken from your first two weekly invoices, for the Expert property you will be given. Please sign Appendix 4 enclosed confirming your acceptance of these items. On termination of this contract by either party, this deposit will be refunded to you in full, providing that both the phone and HHT device are in good condition when they are returned. Without affecting any other rights we have, we may deduct from that deposit any losses we suffer as a result of your breach of this agreement. 12) Driver Bank details must be completed using Appendix 5 to enable payment of your fees. However should any of your details or circumstances change thereafter then please inform the Company as soon as possible using Appendix 6. 13) You will indemnify Expert for all costs, incurred in connection with the provision of the services as a result of any deliberate or negligent act or omission of yours and/or your crew member(s). This includes vehicle damage to Expert vehicles, damaged lost or stolen products or property, third party property damage including vehicle damage and all other damage to persons and property whatsoever. Expert will issue a debit note for any costs mat you need to pay Expert and (without prejudice to any other remedies it has) may deduct these from any payment due to you. 14) Expert carries out monitoring in order to protect the interests of the Company and other road users and its customers. Such recording will take place by way of a video camera within the cab, another within the box itself, one outside the vehicle facing forward and one at tile rear of the vehicle These cameras are operational at all times whilst the vehicle is in your possession. The purpose of the monitoring is to a. Check the quantit:y and qualit:y of services provided by you as one of its sub contractors; b. Safeguard you; c. Check compliance with all applicable laws, including laws relating to Health and Safety d. Assist in dealing with customer complaints. The information collected will be viewed routinely by the Company for these purposes. Expert has carried out an assessment to ensure that the way in which it records or processes this information is lawful and fair to you and other sub-contraCtOrs. It is satisfied that the monitoring that will take place is fair and will not intrude into your and other sub contractor's private lives. Any adverse impact on any sub-contractor is considered by the Company to be justified by the benefits to the Company, customers and other sub contractors. The Company is satisfied that there is no other way in which the Company can reasonably achieve the purposes set out above. Nevertheless if you have any concern about the monitoring you should report them in writing to the Expert Transport Department. By signing this letter, you are confirming you understand and accept and agree that the Company may undertake this monitoring and that you will not tamper with or otherwise interiere with the proper operation of the monitoring equipment 15) Under no circumstances must Expert's vehicles, uniforms or telephones be used for any business other than that directly associated with the delivery of services for Expert. 16) You must (and muse ensure that your crew member(s) and any ocher person(s) you use to provide the services under this agreement) comply with Expert's customer services policies and procedures at all times. 17) You agree to and understand the Substance Misuse Policy by signing Appendix 7. You must ensure that your crew members and any other persons you use to provide the services under this agreement comply with this policy at all times. 18) Your fees will be subject to reduction as set out in Appendix 8 in the event that you fail to provide your services in accordance with our requirements. From time to time we may amend Appendix 8 (both as to the requirements and the fee reductions) and the amendments will be effective in respect of all services provided by you after the amendments have been notified to you. 19) Neither you nor any of the personnel you use to perform the services may enter into any binding contract or other commitment on behalf of Expert nor make any representations or give any warranties or guarantees in relation to the business of the Company or to goods or services supplied by it nor incur any liability whatsoever on behalf of Expert. 20) This agreement may be terminated by either party by giving one week's notice in writing to the other, or by Expert with immediate effect if you (or any of your personnel) commit a material breach of any of its terms or of the terms of any of the policies and/or procedures referred to in it. 21) Following termination by either party, your final payment (subject to deduction of any monies due to us) will be paid 28'days after termination. 22) All information provided to you by Expert relating to customers and the orders for goods placed by customers is strictly confidential. You must only use (and you must expert logistics ensure that your mates, employees and sub-contractors only use) that: information for the purposes of this agreement. You must not disclose (and you must ensure your mates, employees and subcontractors do not disclose) that information to any third parcy. unless you (or they) are required by law to do so. You must comply (and you must ensure your mates, employees and sub-contractors comply) with the provisions of the Data Protection Act 1998 and all other applicable legislation and codes of practice in relation to that information and its processing. 23) You agree that neither you nor any of the personnel you use to carry out the services will provide any other services to any customer of Expert apart from those services that you have agreed with Expert to provide to that customer. In particular, but without limitation, neither you nor any of your personnel shall agree to provide any scrap removal or installation services for a customer unless these have been agreed beforehand by Expert. If a customer requires the provision of services that are not in accordance with the details agreed by you with Expert, you (or your personnel) must refer the matter to the Contact Centre for Expert to agree those services with and take payment from the customer before you (or your personnel) provide those services. Neither you nor any of your personnel shall accept cash or any other payment from a customer for services provided. All payments must be made directly to Expert by the customer. Yours sincerely for and on behalf of Expert Logistics Limited Signed Print name Print position Date I have read and understood the attached letter and acknowledge and agree its terms. Crew name: SIGNED DATE Appendix 3: Fines Schedule Appendix 4: Similarity with other tribunal cases Aslam, Farrar, and Others v Uber http://www.bbc.co.uk/news/business-37802386 https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons- 20161028.pd • October 2016 • Ruled that drivers were entitled to holiday pay, paid rest breaks, and the national minimum wage. • Reclassified as workers rather than “self-employed contractors” as Uber argued. Reasons for the ruling: • “It is not real to regard Uber as working ‘for’ drivers and that the only sensible interpretation is that the relationship is the other way around. Uber runs a transportation business. The drivers provide the skilled labour through which the organisation delivers its services and earns its profits.” This is based on the fact that: o Uber interviews and recruits drivers. o Uber controls the key information and excludes the driver from it. o Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements. o Uber sets the (default) route. o Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties.7 o Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. o Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them. o Uber handles complaints by passengers, including complaints about the driver. o Uber reserves the power to amend the drivers’ terms unilaterally. In all these respects Expert Logistic drivers are similar to Uber Dewhurst v CitySprint UK http://www.bbc.co.uk/news/business-38534524 https://www.wjm.co.uk/news/january--employment-law-bulletin#dewhurst-v-city-sprint-uk • 6th January 2017 • Tribunal found that Maggie Dewhurst, a courier for CitySprint, should be classed as a worker rather than self-employed. • Dewhurst brought a claim before the London Employment tribunal in respect of 2 days’ unpaid holiday pay. • She would thus be entitled to basic rights including holiday and sick pay, and minimum wage. • Dewhurst said: “We spend all day being told what to do, when to do it and how to do it. We’re under their control.” 7 Appendix 3: Fines Schedules • With 3,500 couriers classed as self-employed, CitySprint stressed that the decision would only apply to Dewhurst, adding that further clarity is needed to help businesses navigate this area of law. Reasons: o Dewhurst was employed as courier following a 2-day recruitment exercise consisting of an assessment, entering an employment agreement, and an induction course. o The contract gave Dewhurst discretion as to when she was available to take on jobs and how she would carry them out (e.g. she was free to set her own route). o CitySprint was not obliged to offer jobs and Dewhurst was not obliged to accept them. o The judge gave weight to the fact that invoices were generated by the courier company and not the courier. o The right to sub-contract was impossible in practice due to the conditions placed on the courier and so amounted to no more than a paper right. o The company, in practice, exercised control over the couriers’ working patterns and the couriers did not have the opportunity to develop their business as ultimately it was CitySprint who allocated jobs. Smith v Pimlico Plumbers https://www.judiciary.gov.uk/wp-content/uploads/2017/02/pimlico-plumbers-v-smith.pdf https://www.theguardian.com/business/2017/feb/10/pimlico-loses-appeal-against-plumbers- worker-status-in-gig-economy-case • 10th February 2017 • Gary Smith worked as at Pimlico Plumbers for 6 years, until 2011. • When he suffered a heart attack in 2010, wanted to cut 5-day week to 3 days. • However, the firm refused and took away his branded vehicle that he had hired. • Smith complained of unfair dismissal and entitlement to pay during medical suspension, holiday pay and arrears of pay. Also claimed disability discrimination. • Issue addressed regarding whether Smith was an employee, worker, or genuinely self- employed. • Ruled he should be entitled to claim on disability discrimination and also holiday pay as well as unauthorised deductions from wages. • Maria Ludkin, the GMB’s legal director, said: “This case, like the Uber case last October, is yet another victory for the bogus self-employed who have been treated appallingly by their employer.” Reasons for the ruling: • Mr Smith’s contract required him to provide work on the days agreed with the PP. • Although there was some flexibility, PP expected engineers to discuss their working hours with, and to agree them with, PP. • Mr Smith had sufficient obligation to provide his work personally to be a worker. • Although Mr Smith had autonomy in relation to the estimates and work done, PP exercised very tight control in most other respects. • PP could not be considered to be a client or customer of Mr Smith’s business but is better regarded as a principal; Mr Smith was an integral part of PP’s operations and subordinate to PP – his business was not on his own account. Other Cases Hermes https://www.theguardian.com/business/2016/nov/24/hermes-drivers-told-of-mandatory-sundays- over-black-friday-rush • Apparently ‘self-employed’ drivers told that it is “mandatory” to work on Black Friday. • This contradicts the company’s previous instance that the work was “completely optional”. • The message sent by a field manager stated: “It is mandatory that you cover your own rounds this Sunday the 27th and next Sunday the 4th of December. If you must supply your own cover and informed of who by now [sic] … No excuses.” • Health and Safety Executive considers concerns raised by Frank Field MP, the chair of the work and pensions select committee, that fatigued couriers working seven days a week could pose a road safety risk. https://www.theguardian.com/business/2016/nov/20/road-safety-risk-tired-black-friday-delivery- drivers-health-and-safety-executive • Hermes asked 5,000 staff to work 20 days without a break. Deliveroo • The GMB union is supporting a group of Deliveroo couriers in Brighton who have served 2 weeks’ notice to their employers to offer better pay and more hours. • http://www.bbc.co.uk/news/uk-37905425 o Billy Shannon, a rider who works for Deliveroo in Camden said riders receive £3.75 per delivery. o He added: “We don’t get an hourly fee, so that means at times when there aren’t that many deliveries and it is not that busy, we can be waiting for up to an hour for a delivery without getting a penny.” o Letter from Independent Workers Union of Great Britain (IWGB) asking Deliveroo for recognition for the union to bargain on behalf of the group – however, collective bargaining laws in UK apply to those classed as workers and employees, but not independent contractors. o IWGB general secretary Dr Jason Moyer-Lee said it was seeking a collective bargaining agreement to allow the union to negotiate pay and terms and conditions with Deliveroo managers. o He added: “If Deliveroo ignores or rejects our request, then we will take them to tribunal and ask for a declaration that Deliveroo must engage in collective bargaining with us.” o This would benefit 8,000 Deliveroo riders. Appendix 5: What AO World & Expert Logistics have to say about employees in their Public Statements: John Roberts, CEO of ao.com8 “It is important our drivers are happy. They are the only ones that actually get to meet the customer face-to-face…. If they turn up grumpy smelling of BO, the customer is unlikely to use you again, no matter how good the price is.” “For example, in our depot, we have a guy who is responsible for putting two bottles of water in each delivery lorry. It's a small detail, but it makes our drivers happy and feel valued.” Expert Logistics website “With Our People At Our Core Our business is all about getting appliances to the customer’s homes – delivering the right product to the right place at the right time. But we also spend just as much time and energy on our employees. That’s because we see ourselves as one big family; loyal, caring and supportive. It’s just one of the reasons why the people we work for, and those that work for us like us so much!”9 8 http://www.thisismoney.co.uk/money/comment/article-3586725/A-coffee-founder-AO-com-John-Roberts- good-customer-service-manic-float-fleet-lorries-large-EU-bridges.html 9 http://www.expertlogistics.co.uk/what-we-do/ Appendix 6: Statements from AO World – Annual Report 2000: John Roberts founded appliances online after the famous £1 bet. 2004: Appliances online secured its first major third party retail client. 2009: Acquired Expert Logistics to own our distribution. 2012: Launched SDA category and move a new 360,000 sq. ft warehouse in Crewe. Our strategy: the 4 Cs Culture & Brand Our culture and values are fundamental to our business and through nurturing and growing this culture we will be able to deliver the best customer experience, broaden our categories, expand into new countries, drive our operations and, ultimately, achieve our goal. We recruit and retain the best talent and look for people who are smart, bold and driven. They must care more, not only about our customers but other stakeholders of the business too, be the manufacturers and suppliers, other employees and, of course, our drivers and do it all with a sense of fun. Our values can be found in every single one of our AO people. We hire and fire against them and they are everything our brand stands for, our culture and how our people act will be how our brand is perceived externally. The risks affecting our culture and brand are highlighted on page 23 to 25. My journey to the Croydon depot “So, over the course of the year I’ve been travelling around our business more than ever. It made me immensely proud to see the passion these guys had to just make sure that the turn- around was as quick as possible and their jobs were done well. They even put cold bottles of water in to the cabs for the drivers. They understood that if they did a great job then our drivers would have a better day, which in turn means they’re more likely to be exceptional in the moments that matter. It was clear that they lived it that way. It wasn’t because I was there, you just can’t fake it to that level and certainly not at 2am. It sounds simple doesn’t it? But it really isn’t. Mobilising a tribe, the size of ours to care about every detail more than anyone else does is the smart thing to do, but exceptional customer service can’t be switched on overnight. It’s the cumulative effect of thousands of little things coming together that make it look easy, but again things that look effortless very rarely are.” Strong management and culture Our employees Happy people care more and require a lot less management. So we make sure they’re happy by giving them autonomy where appropriate, support where needed and a great environment to work in. They are empowered, they are incentivised, and they know where they are trusted. We love watching them grow and thrive. Processes and Systems We believe that the standard of the delivery service we provide is crucial, it’s a key part of our ‘pixie dust’ given and delivery teams are typically the only face-to-face interaction that customers have with the company. In the UK, we run a dual branded fleet as out two-man delivery service is also used by a small number of third parties who ask us to deliver their own products through our network on their behalf. Employee empowerment Empowering our people is as important as ever. After all, happy employees are more engaged, deliver better service and require less management. We also have our monthly *state of the nation*, which updates our colleagues on business activities as well the social side of life across the group, which is live streamed to all of our locations. At each session we present awards based on our values to recognise those going above and beyond in terms of both work and culture. Once again, we’ll be carrying out our employee survey, which provides an invaluable insight and allows us to be constantly improving as an employer. In January this year we launched our third save-as-you-earn scheme which was open to all employees who had passed their probationary period. Once again the take-up was strong with almost 20% of eligible employees participating in the option scheme. Equal opportunities AO is also committed to an equal opportunities policy. We aim to ensure that no employee is discriminated against, directly or indirectly, on the grounds of colour, race, ethnic or national origins, sexual orientation or gender, marital status, disability, religion or belief. As part of our programme to develop the next generation of leaders, we enrol our younger colleges on the Duke of Edinburgh scheme. The programme is focused on instilling the values and behaviours that make AO what it is and what it will be in the future. To date we have taken on 21 apprentices in the UK, with 16 of these joining the company last year. 2. John Roberts founder and chief executive officer Electrical appliances moment of happiness. You can’t beat an ice cold beer in the evening, the perfect way to unwind process the day and think about what is next. Appendix 7: AO World Annual Confirmation Statement Company Name: AO WORLD PLC Company Number: 05525751 Confirmation Statement date: 02/08/2016 Statement of Capital (Share Capital) ------Class of Shares: ORDINARY Number allotted 421052631 SHARES Aggregate nominal value: 1052631.5775 Currency: GBP Prescribed particulars ORDINARY SHARES HAVE FULL RIGHTS IN THE COMPANY WITH RESPECT TO VOTING, DIVIDENDS AND DISTRIBUTIONS. EACH SHARE IS ENTITLED TO ONE VOTE IN ANY CIRCUMSTANCES. THE SHARES ARE NOT REDEEMABLE. Statement of Capital (Totals) Currency: GBP Total number of shares: 421052631 Total aggregate nominal 1052631.5775 value: Directors Remuneration Report Annual Bonus Up to 150% of salary for all Executive directors, dependant on performance, but a lower maximum may be operated. Total 2015/16- 1,713,687 For John Roberts and Steve Caunce benefits include gym membership medical and life assurance and a car allowance of £12,000 paid in cash for both years reported for Mark Higgins, benefits include gym membership, medical and life assurance, car allowance and private fuel since his appointment on 1 August 2015. All employee share plans The company proposes to roll out a new SAYE scheme each year and the executive directors will be entitled to participate on the same basis as other employees. Shares held Target Target Options beneficially at shareholding shareholding 31st March 2016 guidelines (% of achieved salary) Richard Rose 723,443 N/A N/A N/A John Roberts 109,393,583 100% Yes 7,093 Steve Caunce 52,122,730 100% Yes 14,400 Mark Higgins 23,928 100% No 637,272 Christopher 22,201,590 N/A N/A N/A Hopkins Brian McBride 52,628 N/A N/A N/A Marisa Cassoni 52,628 N/A N/A N/A Rudolf Lamprecht 52,628 N/A N/A N/A Charles(Bill) 19,815,810 N/A N/A N/A Holroyd 1. Includes shares held by connected persons 2. Includes SAYE options and options granted under the PSP 3. Bill Holroyd was a director during the year but retired at the AGM on 21st July 2015 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total 680 292 243 227 537 537 588 remuneration (£000) Annual Bonus 59% 18% 0% 0% 0% 0% 10% (%) PSP vesting ______(%) Table: shows the total remuneration figure for the chief executive during the financial years ending 31st March 2010 to 31st March 2016. The total remuneration figure includes the annual bonus payable for performance in each of those years. 20. Subsidiaries The group consists of the parent company. AO world Plc, incorporated in the UK and a number of subsidiaries held directly by AO World Plc. The table below shows details of all subsidiaries of the group as at 31st March 2016 Name of subsidiary Place of Principal place Proportion of Principal activity incorporation of business ownership interests and voting rights held by AO World Plc AO retail limited United Kingdom United Kingdom 100% Retail Expert logistics United Kingdom United Kingdom 100% Logistics and limited transport Worry free limited United Kingdom United Kingdom 100% Dormant Elekdirect limited United Kingdom United Kingdom 100% Retail Appliances online United Kingdom United Kingdom 100% Dormant limited AO Deutschland United Kingdom Germany 100% Retail limited AO limited United Kingdom United Kingdom 100% Dormant AO BE SA Belgium Belgium 99 99% Dormant AO NL BV Netherlands Netherlands 100% Retail AO Netherlands Netherlands 100% Logistics and logistics(Netherlands) transport BV The recycled group United Kingdom United Kingdom 60% WEEE recycling limited WEEE collect it United Kingdom United Kingdom 60% Dormant limited WEEE re-use it United Kingdom United Kingdom 60% WEEE recycling limited At 31st March 2016 a proportion (0 01%) of the investment held in AO BE SE was indirectly held by AO world Plc through limited with the remainder (99 99%) being held directly.