Deliveroo riders are not workers, CAC rules


4 mins

Posted on 16 Nov 2017

The Central Arbitration Committee has rejected an application for statutory recognition by the Independent Workers’ Union of Great Britain, ruling that Deliveroo riders are not workers.  

Speedread

The Central Arbitration Committee has rejected an application for statutory recognition by the Independent Workers’ Union of Great Britain, ruling that Deliveroo riders are not workers.  It concluded that the riders' contractual right to substitute another rider was a genuine one which had been exercised in practice.  In the light of this finding, it could not be said that the riders undertook to do personally any work or services for Deliveroo and this was fatal to the Union’s claim.  

Facts   

The Independent Workers’ Union of Great Britain (the Union) applied to the Central Arbitration Committee (CAC) to be the recognised union for Deliveroo riders in Camden.  Deliveroo argued that its delivery riders were not workers and the application should therefore be rejected.  

Deliveroo enters into “supplier agreements” with its riders under which they agree to collect food and drinks from restaurants and deliver them to Deliveroo’s customers (the Services).  The contract terms are set by Deliveroo and there is no scope for individual negotiation.  The drivers are not obliged to work for Deliveroo and Deliveroo is not obliged to make work available for them.  

The contract contains a substitution clause which allows riders to arrange for another courier to provide the Services (in whole or in part) on their behalf.  Riders do not need to obtain Deliveroo’s prior approval.  The only limitations are that the substitute cannot be a former Deliveroo driver whose supplier agreement has been terminated for serious breach of contract or who (whilst acting as the driver’s substitute) has engaged in conduct which would have provided grounds for termination if engaged direct by Deliveroo.  

The riders are paid a fee of £3.75 per delivery (whether by them or their substitute), they are allowed to keep any tips and are not required to wear Deliveroo branded kit.  

Decision

The CAC had to determine whether the riders were workers, as defined in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). The central issue was whether the riders undertook to do or perform personally any work or services for Deliveroo.  

The CAC concluded that the riders’ right to substitute was a genuine one.  Deliveroo had decided to allow riders a right to substitute themselves, both before and after they had accepted a particular job.  The CAC accepted the evidence that this right had been exercised in practice and that Deliveroo was comfortable with it. In the light of this finding, it could not be said that the riders undertook to do personally any work or services for Deliveroo and this was fatal to the Union’s claim.  

Implications 

A genuine right of substitution will defeat a claim for worker status as it cannot be said that the individual undertakes to perform work or services personally.  The contract considered by the CAC in this case was a new contract introduced by Deliveroo in May this year after its previous contracts received criticism from the Work and Pensions Committee’s inquiry into self-employment and the gig economy. The CAC emphasised that it did not matter if Deliveroo’s true purpose in constructing contracts as they did was to avoid riders gaining worker status.  The only question was what the parties had actually agreed. It was alive to the fact that parties may simply place substitution clauses or clauses denying obligations to accept or provide work into contracts as a matter of form, even where they do not reflect the reality of the relationship.  However this was not the case here.   

Although this was a case that considered the definition of a worker under TULRCA, the definition is very similar, but not identical, to the definition of worker in the Employment Rights Act (ERA), Working Time Regulations (WTR) and National Minimum Wage (NMW) legislation.  The CAC considered that the subtly different wording was a distinction without a difference and that the riders would also be workers within the ERA (and it follows therefore the WTR and ERA).  On that basis, these Deliveroo riders would not be entitled to payment of the national minimum wage or paid holiday and would not be able to bring claims for detrimental treatment, for example on whistleblowing grounds.  

The decision of the CAC will not be binding on employment tribunals hearing claims relating to worker status.  A separate employment tribunal claim brought on behalf of Deliveroo riders, who work under different contracts and conditions to those of in Camden, is due to be heard by the Employment Tribunal in July 2018.

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