Earlier this year, the UK Supreme Court ruled that Uber drivers are "workers" for employment law purposes, a decision that could have cost implications for gig economy companies providing similar services.
UK Appeal Court Says Deliveroo Riders Are Self-Employed
However, on 24 June the Court of Appeals rejected a claim that riders working for takeaway food delivery service Deliveroo should have the same employment status, deciding instead that they are self-employed, in the process potentially sowing further seeds of confusion around the employment and tax position of gig economy workers.
The case began when the Independent Workers Union of Great Britain (IWGB), representing a group of Deliveroo riders in London, applied for collective bargaining rights on their behalf. However, in November 2017 the Central Arbitration Committee (CAC) rejected the application on the grounds that riders do not meet the definition of "workers" under trade union legislation because they do not necessarily have to provide their services "personally" i.e., they are free to effectively sub-contract out their delivery slots. As such, they are deemed self-employed and not entitled to collective bargaining rights.
Subsequently, the IWGB unsuccessfully contested this decision in the High Court, before appealing to the Court of Appeal, which agreed with the CAC in a unanimous verdict.
Whilst the appeal judges considered existing precedents and national, EU and international law in this area, a key factor swinging the case in the favour of the company continued to be the fact that Deliveroo riders have considerable flexibility in how they undertake their work, including, crucially, the ability to use a substitute to deliver on their behalf. They are also required to supply their own equipment, such as bicycles and phones, other hallmarks of a self-employed person.
A tale of two rulings
This ruling appears to contradict the decision handed down by the Supreme Court in the Uber case, with drivers adjudged to be workers under employment law and therefore entitled to some employment rights. However, while there are certain similarities in the way the two companies arrange their services, in the Uber case the judges found that, unlike Deliveroo, the firm exercises a considerable degree of control over its drivers, such as by fixing driver pay, dictating contractual terms, constraining drivers' choices on accepting ride requests and restricting communication between drivers and passengers.
The possibility remains that the latest ruling will be appealed up to the Supreme Court, where the judges might interpret things differently. However, if anything, the Deliveroo ruling further underlines the fact that there is no one-size-fits-all employment law approach to the gig economy and that, given the differing business models of companies in the sector, each case must be considered on its own facts and merits. This point was noted by Lord Justice Coulson in the Court of Appeal, who observed that "there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate."
This is certainly unhelpful to gig economy companies who continue to face uncertainty over the employment and tax status of those they engage as well as the possibility of lengthy and costly litigation brought by workers. Therefore, to avoid additional employment costs, companies may wish to ensure that there is as little ambiguity as possible in their contracts of engagement.