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Employment Law

Legal guidance - compliance - software

Veale Wasborough Vizards , 04 DEC 2017

Deliveroo riders not workers - what are the implications for employers?

Deliveroo riders not workers - what are the implications for employers?
Helen Hughes
Veale Wasbrough Vizards

A decision by the Central Arbitration Committee (CAC) has bucked the trend in recent employment tribunal decisions on worker status in the 'gig economy' by deciding that Deliveroo riders are not workers.

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In Independent Workers Union of Great Britain v RooFoods Ltd (t/a Deliveroo) the Independent Workers' Union of Great Britain (IWBG) submitted an application to the CAC to be recognised for collective bargaining in respect of Deliveroo riders in Camden. Deliveroo argued against this application on the basis that its riders were not workers under the relevant statutory definition.

After reviewing the relationship between Deliveroo and its riders, the CAC rejected the IWBG's application on the basis that the riders were not workers. The main issue in dispute was whether the riders were obliged to provide a personal service and a key point in determining this was whether they had a genuine right of substitution.

The agreements between Deliveroo and the riders clearly allowed for riders to provide a substitute without the need for prior approval or even to inform Deliveroo that a substitution had taken place. There was evidence that the substitution option was used in practice, with one individual subcontracting the work for a 15-20% share in the delivery fee.

The CAC found that the right of substitution in this case was genuine, which meant that the riders were not providing a personal service and were not workers. The CAC made clear that the facts in this case were very different from other recent worker status cases.

Best Practice

Despite the recent trend of cases in which individuals have been held to be workers even though their contracts stated that they were self-employed contractors, this case shows that there is still scope for the self-employment contractor model to operate without engaging either employee or worker status.

Businesses seeking to engage individuals as self-employed contractors must ensure that in practice the individuals providing the services meet the necessary criteria including in particular exercising a genuine right of substitution.