The UK Supreme Court has declared that Deliveroo riders cannot be considered employees, and thus, are not entitled to representation by trade unions for collective bargaining.

This verdict comes after a seven-year legal battle led by the Independent Workers’ Union of Great Britain (IWGB), the largest union for app-based couriers in the UK.

The unanimous judgment, delivered by five Supreme Court judges on Tuesday, emphasised that the contracts between Deliveroo and its riders do not establish an “employment relationship.”

Central to the ruling was the riders’ ability to enlist another individual to fulfil their deliveries without requiring intervention from Deliveroo.

The court argued that this autonomy, including the freedom to reject offers of work and engage with competitors, contradicts the essential elements of an employment relationship.

A “positive judgment”?

Deliveroo welcomed the decision, hailing it as a “positive judgment” for its riders. The company asserted that the flexibility to decide when, where, and whether to work is a key driver for the thousands who apply to work with Deliveroo each week. The company emphasised its commitment to providing security through free insurance, sickness coverage, support for new parents, and a unique union recognition agreement.

This legal saga began in 2017 when the Central Arbitration Committee initially dismissed the case, determining that Deliveroo riders were self-employed due to their ability to substitute someone else to complete their orders. The IWGB persisted, taking the case through the appeals process, ultimately reaching the highest legal authority, the Supreme Court.

The IWGB expressed disappointment with the ruling, stating, “We cannot accept that thousands of riders should be working without key protections,” and vowed to continue advocating for the rights of gig economy workers through all available avenues.

Yvonne Gallagher, a partner at the law firm Harbottle & Lewis, highlighted the broader implications of the ruling for the gig economy. She suggested that the Supreme Court’s emphasis on the substitution clause may prompt other gig economy companies to adopt a similar employment approach.

This will have ripple effects

The judgment coincides with Deliveroo’s financial updates, revealing pre-tax losses narrowing from £127.1 million in the first half of the previous year to £57.6 million in the first six months of 2023. The company’s revenue increased by 5 percent, reaching £1 billion, with £418.4 million generated outside the UK and Ireland. The European Council is currently discussing proposals for enhanced employment protections for gig economy workers in EU member states.

This ruling may have ripple effects across the gig economy, prompting companies to reevaluate their employment models. Andrew Willis, Associate Director of Legal at Croner, emphasised the importance of correctly categorising workers, cautioning that tribunals can scrutinxise the actual nature of the employment relationship, regardless of contractual terms. The repercussions of misclassification could leave organisations liable for claims related to holiday pay and the minimum wage, reinforcing the significance of accurate categorisation from the outset.

 

 

 

 

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.