Deliveroo worker status judgment: implications for employers
Deliveroo worker status judgment: implications for employers
Sarah Filsell

31 January 2024

In our January update we reported on the Supreme Court decision in the long running dispute between Deliveroo and the unions representing many of its riders. You can read the full Judgment here. 

Where did it all begin?

It all started with an application for trade union recognition by the Independent Workers Union of Great Britain (“IWGB”) on behalf of a group of Deliveroo riders in Camden and Kentish Town. An essential part of this application is that the riders have worker status. However, the Central Arbitration Committee (“CAC”) found that Deliveroo riders were not “workers” within the meaning of section 296 of the Trade Union and Labour Relations (Consolidation) Act 1992. This meant that the application for trade union recognition could not proceed.

The union applied for a judicial review of the CAC’s ruling, which was only allowed to proceed on a single ground which related to Article 11 of the European Convention on Human Rights.  The High Court dismissed their appeal and so the IWGB appealed to the Court of Appeal who agreed with the High Court. IWGB then appealed to the highest court, the Supreme Court.

The Supreme Court identified four issues that they needed to decide. The first issue was whether the employment status of the Deliveroo rights meant they fell within the scope of Article 11 and could enjoy the right to join and be represented by a trade union. The Supreme Court rejected the argument from IWGB that these rights apply to everyone. Instead, the Supreme Court identified that the presence of an employment relationship was necessary to be able to enjoy the rights in Article 11.

The CAC ruling and subsequent decisions of the High Court and Court of Appeal all focussed on the power of the riders to appoint a substitute. The Supreme Court turned their attention to this substitute clause and asked if the clause was genuine and if it was used in practice. The Supreme Court found that the right to appoint a substitute was virtually unfettered, was not limited to other Deliveroo riders and can be exercised before or after the rider has agreed to make a delivery. There was no monitoring or policing by Deliveroo of a rider’s use of the substitution clause, nor was there any restriction on who the rider could use as the substitute. This contrasted to the requirement of personal service that is fundamental in an employment relationship.

The Supreme Court decided that this was enough to determine that the Deliveroo riders were not in an employment relationship with Deliveroo. However, it noted that there were further features of the relationship that the riders had with Deliveroo that were fundamentally inconsistent with an employment relationship. They were:

  • Riders were not obliged to carry out any deliveries at all and did not have to be available to make deliveries.
  • Riders worked when they chose with no fixed hours, they were able to stop and start work to suit them.
  • Riders worked where they chose with no set place or area of work.
  • Riders had to provide all the equipment needed to make the deliveries at their own expense.
  • Riders were paid depending on the deliveries they chose to make, there were no regular payments.
  • The deliveries were typically not the riders’ main source of income and even when it was, they often worked for Deliveroo’s competitors as well.
  • Riders did not receive any payments in kind, such as food.
  • Riders did not have an entitlement to holiday or weekly periods of rest.
  • Riders were not reimbursed for travel costs.
  • The financial risk rested with the riders, and Deliveroo did not offer any protection from it in the form of insurance or guaranteed earnings.

As the Supreme Court found in Deliveroo’s favour in the first issue, it did not need to make any decisions on the remaining issues. However, the Supreme Court took the opportunity to clarify the position on whether, if riders had rights under Article 11, these rights required UK law to compel Deliveroo to engage in compulsory collective bargaining with the union. The Supreme Court found that Article 11 did not create any right to compulsory collective bargaining.

Implications

This case confirms that a genuine substitution clause can be relied upon to disprove the existence of an employment relationship. If the substitution clause is fettered in any way it will only be a dominant feature and not a determining factor.

Companies who want to rely on substitution clauses need to make sure that the clause is not subject to any conditions or restrictions and ideally is used in practice. In employment disputes the Courts and Tribunals are always keen to look behind the contract and identify what happens in practice.

Finally, the case confirmed that Article 11 does not create any right to compulsory collective bargaining.

If you have any questions or need employment advice, please contact our employment team.

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