Hot on the heels of the Uber decision last week, labour law body the Central Arbitration Committee (CAC) has ruled that Deliveroo riders are in fact self-employed. The Independent Workers Union of Great Britain (IWGB) had brought the case after Deliveroo declined to start collective bargaining over workers' rights. Noting the confusion this now throws on the ‘gig economy’ after the Uber ruling, Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA) explained the reasoning behind the decision.
“The Deliveroo result is good news for Deliveroo and those couriers who value the flexibility that comes with being a self-employed rider,” she said. “The whole case hinges on the detail of the contract and the central arbitration committee found that these riders were self-employed because of their freedom to ‘substitute’ and allow other riders to take their place on a job. This is an important clause but caution is needed as a contractual substitution is not the magic solution for any company looking to falsely deem its workforce as self-employed and shun its employment responsibilities.
“It is the working practices that should be borne in mind, not just the contract, and how that right of substitution might work in practice,” she adds. “If it is a genuine unfettered right of substitution that has been acted on in practice then the engagement starts to look more like self-employment; by comparison an employment relationship does not allow for such a substitution.”
Emma O’Leary, employment law consultant for the ELAS Group noted: “The CAC adjudicates on recognition for unions for collective bargaining purposes and this application was brought by the IWGB looking to gain recognition by Deliveroo. Presumably, if they had been successful, the Union would be attempting to garner support throughout the gig economy.
"In order to have been successful in their application, the Union needed Deliveroo riders to be classified as workers,” she says. “The CAC appears to have considered the employment status tests and found that substitution was the Union's downfall. “As they are able to send substitutes, the riders must therefore be self employed, meaning they do not have the right to paid holiday pay, SSP or even the National Minimum or Living Wage,” she added. "We should note that this is not a binding authority for employment law purposes as it is a CAC ruling rather than a tribunal, however, there is an ongoing claim with the Employment Tribunal that was brought by 45 Deliveroo couriers. It will be interesting to see the comparison between this ruling and the Tribunal's when the case is eventually heard.”
"Employment status is complex and what is important is that employers need to carefully consider how they engage their workforce whether they are genuinely employed or self-employed,” emphasised Julia Kermode. “Large numbers of highly skilled professionals choose self-employment status because it gives them the freedom and flexibility to operate as a business in their own right. However there are incidences where self-employment is forced upon people inappropriately. Employers should treat their workforces properly so that exploitation cannot happen and it is unacceptable that some workers do not have minimum rights or protections. As the gig economy is on the rise we need to act to protect the vulnerable and precarious whilst not unfairly penalising genuinely self-employed people.”