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Supreme Court did not Deliveroo for riders, ruling they are not in an ‘employment relationship’

November 24, 2023

Many of you will have seen from press coverage that the Supreme Court has thrown out the Deliveroo rider employment status challenge in a decision hailed as ‘fundamentally important for the gig economy, not just Deliveroo’.      

So, what is it all about?

As the judgement says, Deliveroo riders have become ‘a familiar sight in our streets’ as their bikes or motor-scooters transport take-away food from the restaurant to homes and offices.   They form part of an ever growing ‘gig economy’ in which work is carried out by independent contractors and freelancers, rather than full-time permanent employees.  Gig workers typically enjoy more flexibility and independence, but compromise that for little or no job security and minimal other benefits.

In recent years some gig workers have taken legal steps to argue an entitlement to enhanced rights that are more usually enjoyed by employees, in cases such as Pimlico Plumbers v Smith and Uber BV v Aslam

The Deliveroo case is a little different, as the riders wanted compulsory recognition of a Trade Union (the Independent Workers Union of Great Britain (‘IWGB’)) so that the Union could represent them in negotiating improved conditions on working hours and holiday entitlement. 

Previous consideration of the case

The case was initially considered by the Central Arbitration Committee (CAC), who determined that the riders were not ‘workers’ within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992, meaning that the Union’s application for compulsory recognition could not proceed.  

The Union then applied for judicial review of the CAC’s ruling and the question of whether the riders fell within the scope of article 11 of the European Convention of Human Rights.  This was considered by both the High Court and Court of Appeal.  Both courts rejected this argument, determining the riders were not in an employment relationship with Deliveroo. 

What did the Supreme Court say?

The Supreme Court’s first consideration was the question of the ‘employment relationship’.  They determined that the right of Deliveroo riders to appoint a substitute rider in their place was a genuine entitlement.  The Court held that the right of substitution was ‘virtually unfettered’; not limited to substituting other Deliveroo riders and applied before and after the rider had agreed to make a delivery.  Further, Deliveroo did not police the riders’ use of a substitute and the riders were not criticised or sanctioned for using a substitute.  Deliveroo also did not object to their riders working for their competitors.  Therefore, the Supreme Court was satisfied this was not an employment relationship and was sufficient to determine the issue before the Court.

The Court also noted that a number of other features of the working relationship that the rider had with Deliveroo were also ‘fundamentally inconsistent’ with the employment relationship.  These included:-

• Riders did not have to carry out any deliveries.
• Riders did not work within specific working hours, but would operate if and when they chose.
• Their place of work was not specified or agreed.
• Their activity was not of a particular duration, nor did it have a certain continuity.
• As regards tools, materials and machinery, all equipment was at the riders’ expense and they used their own cycles and mobile phones.
• Remuneration was dependent on whether the riders chose to make deliveries and how many they made.
• There was no payment in kind such as food, lodging and transport.
• There was no entitlement to weekly rest and annual holidays.
• There was no reimbursement for the cost of travel.
• There was no protection from financial risk for riders, whether in the form of insurance, guaranteed earnings or otherwise.

The ‘take-aways’ from this decision

This decision gives some clarity to business operators involved in flexible labour models that a genuine power of substitution should defeat a claim that a worker is entitled to certain ‘employment’ rights. Those involved in this area may wish to consider whether they wish to restructure their own arrangements, with this outcome in mind. 

It also serves as a useful reminder that a Court or Tribunal will look beyond written terms governing working relations to consider the practical reality of those arrangements. 

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

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