Finally a decision that a ‘gig’ company is not employing workers.
It’s a case* that has made headlines as it is the first to go against the trend that has seen City Sprint, Excel, and most recently Uber lose in legal challenges to their business model that relies on those it engages as being ‘self-employed’.
The Central Arbitration Committee (CAC) has found that the Deliveroo contracts gave the riders who carried out their deliveries a genuine right to provide a substitute.
This was an express contractual provision in which Deliveroo had made it plain that riders had the right to substitute themselves both before and after they have accepted a particular job.
More importantly Deliveroo were able to provide sufficient evidence to persuade the Panel that this was not a sham and that this accurately reflected what happened in practice. Substitution did take place and Deliveroo was ‘comfortable with it’.
However this was not a decision regarding a claim for paid holiday or national minimum wage. The case was decided not by an Employment Tribunal or the Employment Appeal Tribunal. It was a decision by the CAC that primarily adjudicates on disputes regarding the rights of unions to gain recognition in companies that had refused a request to collectively bargain.
In reaching this conclusion the CAC was finding that the riders were not workers for the purpose of the Trade Union legislation that entitled a union to seek recognition. It was not deciding that the Riders were not workers for the purpose of the employment legislation under which previous cases have held that workers were entitled to paid holiday and national minimum wage.
It must be said that the differences in the definitions are minimal and the same principles would apply. However this decision does not prevent an Employment Tribunal from reaching a different conclusion in a claim for worker rights.
This decision does not mean that by redrafting contracts to include a right to provide a substitute worker rights can be avoided. It must be remembered that in a number of cases the Employment Tribunal has held the right to provide a substitute did not prevent the claimant having worker status. This may have been due to the right being subject to some limitations in practice or simply the fact that it was not in reality a right that was exercised.
The decision highlights more than anything the confusion that surrounds the employment status issue. The Taylor report published in the summer recommended more clarity be provided in relation to employment status. The focus in the legislation is the requirement for the individual to provide personal service. The Taylor report recommended that instead of personal service clauses being used to justify self-employment labels the legislation should focus on the amount of control the company exercised over the individual.
This blog post was written by Benedict Gorner. For further information, please contact:
Benedict Gorner, partner, Employment
T: 0121 234 0268
*Independent Workers’ Union of Great Britain (IWGB) v RooFoods Limited T/A Deliveroo TUR1/985 (2016)