Union accuses food delivery firm of ‘gaming the system’ as couriers are ruled to be self-employed rather than workers
Deliveroo has won a legal battle over its drivers’ employment status.
Deliveroo won the right not to give its couriers the minimum wage or holiday pay on Tuesday, dealing a blow to campaigners for workers’ rights in the gig economy.
In a key legal ruling the Central Arbitration Committee, a body that resolves worker disputes, said the food delivery firm’s riders were self-employed contractors as they had the right to allocate a substitute to do the work for them.
The case, brought by the Independent Workers Union of Great Britain (IWGB) as part of an attempt to gain recognition by the company, relates to couriers in the Camden and Kentish Town districts of north London. But it is seen as a test case for riders across the UK, including those working for other firms similar to Deliveroo.
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The CAC ruling said: “The central and insuperable difficulty for the union is that we find that the substitution right to be genuine, in the sense that Deliveroo have decided in the new contract that riders have a right to substitute themselves both before and after they have accepted a particular job; and we have also heard evidence, that we accepted, of it being operated in practice.”
It said that its finding on this particular aspect of the relationship between Deliveroo and its riders was “fatal to the union’s claim.”
The union can take the decision to judicial review, but it is still considering its position.
Dan Warne, the managing director for Deliveroo in the UK and Ireland, said: “This is a victory for all riders who have continuously told us that flexibility is what they value most about working with Deliveroo.”
He said the company wanted employment law to be changed so Deliveroo could offer injury pay and sick pay while maintaining flexibility.
“We want to work with the government to update legislation and end the tradeoff between flexibility and security,” Warne said.
The IWGB said the CAC had found that the majority of Deliveroo riders were likely to support union recognition and that the courier firm had found a way to “game the system”.
At the CAC tribunal in May, it emerged that Deliveroo had recently made a series of changes to its contracts, including allowing riders to bring in someone to cover their work. Being unable to send someone else to do your work is a key definition of a worker, an employment classification that carries the right to the national minimum wage, union recognition and holiday pay.
The company also removed performance monitoring and a requirement for riders to wear its branded clothing, both factors seen as central to differentiating between workers, who are service providers closely controlled by an employer, and self-employed contractors.
Jason Moyer-Lee, the IWGB general secretary, said: “It seems that after a series of defeats, finally, a so-called gig economy company has found a way to game the system.
“On the basis of a new contract introduced by Deliveroo’s army of lawyers just weeks before the tribunal hearing, the CAC decided that because a rider can have a mate do a delivery for them, Deliveroo’s low-paid workers are not entitled to basic protections.”
Crowley Woodford, an employment partner at law firm Ashurst, said: “This will be a significant blow to the unions who are trying to expand their membership within the gig economy by challenging the basis on which such employers engage and use their labour.”