Co-op’s preferred employment agency faces legal action over ‘bogus self-employment’

Britain’s largest union, Unite, announced today (Thursday 8 June) that it was preparing legal action against an employment agency supplying drivers for Co-op supermarkets over the use of ‘bogus self-employment’ practices which are resulting in pay differences of nearly £3 an hour.

The move to prepare employment tribunal cases by Unite’s strategic case unit follows a refusal by the Co-op to end the exploitation of agency drivers on Co-op contracts.

Agency Drivers Network (ADR) is the Co-op’s preferred agency and provides drivers across the country to the ethical retailer either directly or where it has outsourced logistics to its third party contractors, such as Wincanton and XPO.  

Unite claims that ADR demands drivers set up their own limited company and refers workers to an accountant so they can operate under a ‘bogus self-employed’ model to avoid agency workers regulations and basic rights including holiday pay, statutory sick pay and minimum statutory pension payments.

Lawyers from Unite’s strategic case unit recently met with agency drivers from Co-op’s Lea Green depot in Merseyside. They found that drivers operating under the ‘bogus self-employed’ model were receiving nearly £3 an hour less than directly employed drivers in addition to no holiday or sick pay, pension or other basic worker rights.

Unite represents Co-op drivers and has a national recognition agreement with the ethical retailer.

Commenting Unite assistant general secretary for legal services, Howard Beckett, said: “All the advice we’ve received points to ‘bogus self-employment’ practices being used to drive down wages and deny workers of their basic rights.

“The ‘limited company’ sham being adopted on the Co-op contract at Lea Green does not reflect the reality of the working or contractual relationship for agency drivers who are earning up to £3 an hour less than their directly employed colleagues.

“This ‘bogus self-employment’ model is a cruel ruse by penny pinching bosses and further evidence of how exploitative working practices are mutating under the guise of the so called gig economy.
 “We are currently advising members on potential claims for holiday pay, unlawful deductions from wages and breaches of the agency worker regulations. We expect to lodge employment tribunal claims in the coming weeks.

“Other companies who think they can dodge workers’ rights with ‘bogus self-employment’ should beware. This is precisely the type of case which Unite’s strategic case unit was set up to deal with.”

Unite national officer, Adrian Jones, added: “The refusal by the Co-op to stamp out the ‘bogus self-employment’ practices of its preferred employment agency run contrary to its ethical commitment to ensure decent working conditions are upheld in its supply chain.

“Unite has made repeated attempts to resolve the issue with Co-op and its employment agency. Yet it appears that cost cutting trumps the ethical values that the Co-op professes to uphold, leaving us with little option but to use the full force of the law to defend our members’ rights.

“I would encourage any members who think they are affected by ‘bogus self-employment’ at Co-op and elsewhere in the logistics sector to contact Unite for further advice.”