As tech and delivery giants tumbled like dominoes during last year’s spate of gig economy legal battles, one company stayed standing: Deliveroo.

To understand why Deliveroo currently does not have to pay their torquise-clad ‘Roos’ the Natinonal Minimum Wage, sick pay or holiday pay, we need to look at the background to the case against them.

Before we do that, let me say that this is by no means a closed book: there are ongoing Tribunal claims against the company that could upset the status quo.

Case background

In November 2016, the Independent Workers’ Union of Great Britain (‘IWGB’) brought an application to the Central Arbitration Committee (‘CAC’) under employment legislation [1] to be recognised for collective bargaining by RooFoods Limited (trading as Deliveroo). The Union sought to represent 100 Deliveroo riders in a particular geographical unit (out of around 4,500 in total).

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Unlike the Employment Tribunal claims against Uber and Pimlico Plumbers, this application was brought by the Union, not the workers themselves. However, the legal question for the CAC was very similar, if not identical, to the question of ‘worker’ status that the Tribunal was deciding in those other gig economy cases.

The evidence

The Roos were described in the company’s literature as the lifeblood of Deliveroo. They are charged a refundable £150 deposit for their distinctive, high-visibility equipment and clothing. The company conducts a telephone interview, a trial shift followed by training for each Roo.

Despite this, their most recent contract contained a clause allowing them to substitute another person to work for Deliveroo on their behalf (although swapping orders was not allowed due to confusion that may cause to the GPS system).

Roos were permitted to work for other delivery companies, including Deliveroo’s competitors. The more recent contract had removed the requirement to wear at least one item of branded equipment. Under the contract, the Roo gives certain warranties including that they have the right to reside and work in the UK.

There were disputed accusations against Deliveroo of employing under-hand tactics, including the use of surge pricing to draw Roos away from Union meetings with the lure of higher-paid work, the distribution of Amazon gift vouchers for those who signed a petition against the Union and a campaign of misinformation regarding the loss of flexible working and imposition of taxes that would follow from recognition as ‘workers’.

The outcome

On 14 November 2017, the CAC concluded that the Riders were not under any obligation to perform work and did not contract personally to perform work for Deliveroo.

This was primarily based upon the fact that the contract contained a genuine, if somewhat impractical, right of substitution (§ 98 to 101). The Riders were free to substitute at will under the contract and therefore were not personally obliged to work for or provide services to Deliveroo.

At § 103, the Panel observed:

By allowing an almost unfettered right of substitution, Deliveroo loses visibility, and therefore assurance over who is delivering services in its name, thereby creating a reputational risk, and potentially a regulatory risk, but that is a matter for them.

Comment

A simple question lies at the heart of these gig economy cases, whether its riders, drivers, cleaners or couriers: who do they work for? [2]

Even after the CAC’s decision, the situation is fluid. The Union has been fundraising to mount a challenge to the decision.

 

For its part, the company has promised to extend certain protections to their riders, but only if the government makes changes in legislation to allow the company to maintain a fully flexible workforce – something it claims that its riders value.

Lastly, there are ongoing Tribunal claims against Deliveroo for National Minimum Wage, holiday pay and discrimination (listed in July 2018) by a number of riders. That case is likely to re-visit the issue of the riders’ employment status under differently worded contractual terms. It’s worth noting that the CAC’s findings do not bind the Tribunal. The CAC were applying a subtly different statutory definition of ‘worker’. [3]

For now, thje Deliveroo delivery persons dropping off gourmet food to your door can be paid under the National Minimum Wage.

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[1] Under schedule A1 and section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (‘TULR(C)A 1992’).

[2] See the comments of Her Honour Judge Eady QC in the EAT’s judgment of Uber’s appeal, at § 103.

[3] Found in section 296 of the TULR(C)A 1992.

 

Posted by Ben Amunwa

Founder and editor of Lawmostly.com. Ben is a business and public law barrister with the 36 Group. He gives expert legal advice on employment, immigration and commercial disputes to a wide range of clients.

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