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A Deliveroo rider in Edinburgh | AccountingWEB | Deliveroo riders are not workers
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Deliveroo riders are not workers

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The Supreme Court has ruled that Deliveroo riders are self-employed, not 'workers', in a landmark employment status case that highlighted the pivotal role of contractual terms in the employment relationship.

13th Dec 2023
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Deliveroo riders have become a well-known sight these days delivering takeaways to homes and offices. They are historically self-employed but, many of the riders in London have joined the Independent Workers Union of Great Britain, which is an independent trade union (the Union).

They wanted the Union to negotiate on their behalf to improve conditions under which they perform their services. Deliveroo had refused to recognise the Union or enter into collective bargaining negotiations with them.

Recognition of the Union

The Union took the case to the Central Arbitration Committee (CAC) who analysed the nature of the relationship between the riders and Deliveroo but, ultimately decided that the riders were self-employed. The High Court and now the Supreme Court have both agreed that the riders were self-employed.

What is of interest in this case, however, is the part of the Supreme Court judgment which deals with employment status and deciding whether the riders were employed or self-employed.  

European Convention of Human Rights

This case was actually brought on the basis of article 11 of the European Convention of Human Rights which protects the general rights of freedom of peaceful assembly and freedom of association with others. In order to get these rights, however, there has to be an employment relationship.   

Substance of the rider relationship

The Supreme Court had to decide whether the riders were workers or not and to do this they needed to look at the substance of the Deliveroo-rider relationship.

Deliveroo had re-drafted their agreement with the riders in order for it to be more appropriate for the self-employed. The court accepted this new contract but, closely scrutinised the clauses to establish whether the terms genuinely reflected the reality. 

Working practices

The workers had to provide their own equipment including the vehicle that they used to deliver the services, a mobile phone and third-party liability insurance. The rider was also required to ensure that the insurance covered any substitute that they used.

They were not required to wear Deliveroo branded uniform and they could work for a competitor at the same time and without requiring authorisation. Riders were also required to use food transportation equipment which met Deliveroo’s safety standards.

Unfettered substitution

One of the main points of the CAC judgment was the factor regarding substitution.  This was also an important part of the Supreme Court judgment.  When delivering the new contracts, Deliveroo specifically drew attention to the substitution clause:  “You will see that this agreement means you still have the ability to appoint another person to work on your behalf with Deliveroo at any time.”

The court found that the substitution clause was “broad and virtually unfettered…”  Deliveroo stated that: “All acts and omissions of the substitute shall be treated as though those acts and/or omissions were your own. You shall be wholly responsible for the payment to or remuneration of any substitute at such rate and under such terms as you may agree with that substitute…”

In practice, the CAC had found that the substitution clause was rarely used. This was because Deliveroo made it very easy to work or not work. There was no obligation to accept work and none for Devlieroo to provide it. Despite it being rarely used, however, it had been used on occasion and on one occasion, the rider made a profit.

Control

The previous Deliveroo contract had far more control in it, including a strict uniform policy and a different attitude toward substitutes. The CAC found, however, that both the written contractual terms and how the parties conducted themselves had changed with the introduction of the new contract. The CAC accepted Deliveroo’s submission that the new terms were permissible even if they had been introduced by Deliveroo to defeat the claim and to prevent the riders from being classified as workers.

Contractual prevalence

This case proves again that the contract is all important and it's never too late to re-draft. Although, it was clear from this case that Deliveroo has worked hard to make sure that the terms of the contract were followed up in practice. They did not control the riders and there was a genuine right of substitution.

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Replies (6)

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By johnjenkins
14th Dec 2023 11:00

As I have constantly said, Justin please take note, get the "contract for services" right, stick to it and it will withstand all challenges.
Please, pretty please with knobs on let's get rid of this EU word "worker". We are all workers in one way or another.

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By paul.benny
14th Dec 2023 12:56

I think you will find that "worker" as used in English law is term from the Employment Rights Act 1996 s230 and does not derive from the EU.

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By johnjenkins
14th Dec 2023 14:04

The term "worker" is an EU term that cannot be defined nationally, if I remember right. It was used in a dispute over holiday pay for the self-employed.

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By tonyaustin
14th Dec 2023 11:35

It just goes to show that it is possible to have a contract that neither makes an individual an employee nor inside IR35 if an intermediary is used - as long as both parties agree the terms and stick to them!
I wonder how many contractors in IR35 cases would have been able to get their clients to agree a substitution clause like the one Deliveroo used.

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Replying to tonyaustin:
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By johnjenkins
14th Dec 2023 11:45

It's not just the substitution clause. A lot of work givers have a clause that puts all the tax liability (including costs of investigation) on to the work doer. I have seen many contracts that aren't fit for purpose because the work givers are frightened about IR35 and that they might have to pay.
Trouble is many want their cake and eat it too.

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By Tipptop
15th Dec 2023 09:47

But the Irish Supreme Court went the opposite way for Domino's Pizza . That's mad Ted!
https://www.revenue.ie/en/corporate/press-office/press-releases/2023/pr-...

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