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November 2017

The latest on worker status in the gig economy, and why Uber drivers are workers and Deliveroo riders are not

Introduction

On 10 November 2017, the Employment Appeal Tribunal published its judgment in Uber BV & others v Aslam & others [2017] UKEAT/0056/17/DA, which concluded that two private hire/taxi-like drivers were workers.[1] Worker status entitles an individual to certain rights, and in particular, National Minimum Wage, holiday pay and sick pay. That sort of judgment can have massive repercussions for an individual’s employer, such as Uber, who thought and therefore was treating members of staff as self-employed. That is to say, individuals who were in business on their own account. (We do not comment on the separate but related tax as opposed to Employment Law position here). 

On 14 November 2017, the Central Arbitration Committee (“CAC”) handed down its own judgment in Independent Workers’ Union of Great Britain v RooFoods Limited t/a Deliveroo TUR1/985(2016). The CAC decided in that case, that a group of Deliveroo motor and pedal bike riders, who delivered food for restaurants on behalf of Deliveroo, were not workers, but are genuinely self-employed.  So in less than a week, we appear to have even less certainty in the law regarding worker status in the gig economy, but is this really so?

The Central Arbitration Committee judgment

The Deliveroo decision was on a very particular jurisdictional issue. The Independent Workers’ Union of Great Britain (IWGB) applied to the CAC to be recognised for collective bargaining by Deliveroo for a bargaining unit comprising a specific group of individuals, namely Deliveroo riders in the Camden zone. As a result, two issues were to be decided by the CAC:

  1. Whether the riders were “workers” within the meaning of section 296 of the Trade Union and Labour Relations (Consolidation) Act (“TULRCA”) 1992;

  2. Whether the required level of support for Union recognition within the proposed bargaining unit had been met.

As we know, the answer to the first question was no: The riders were not workers (albeit, the CAC would have found in the IWGB’s favour on the second point). Interestingly, the CAC’s reasoning hung on one central issue: that of personal service and substitution. The CAC found that the right for a Deliveroo rider to substitute themselves for another rider before or during a job was “genuine.” First, the right was stated in their contracts with Deliveroo. Secondly, substitution occurred in practice. In witness evidence, the CAC heard how one group of riders socialise together at a cafe close to a restaurant hot spot (it appeared that this was in order to optimise their chances of receiving lots of work, when they decided to work). On one occasion, a rider, after accepting a delivery job on his Deliveroo app, decided that he did not wish to start the job. (He wanted to continue sitting and chatting in the cafe). So he passed the job onto one of the other riders sitting with him, by handing them his device, containing the Deliveroo app, which in turn, would contain the delivery instructions and details. Another Deliveroo rider, Mr Asim Munir, said that he regularly engaged a substitute by giving a friend his App to download, together with his Deliveroo password details. When Mr Munir was cross-examined at the CAC hearing as to why he might do this, he admitted that he was sub-contracting. He took 15-20% of the fee, which he received from Deliveroo, and passed the remainder onto his friend. The CAC found that Deliveroo “does not object to this practice.”

In addition, Deliveroo riders were able to complete mid-job substitution, whereby they could hand the job back via a Rider Support team, who would arrange for another rider to take over the job. The CAC concluded that “in light of our central finding on substitution, it cannot be said that the Riders undertake to do personally any work or services for another party. It is fatal to the Union’s claim…. The delivery has to be undertaken by a person, however it does not have to be the Rider that personally performs it and Riders are free to substitute at will. We appreciate the high level of trust required in the substitute by the Rider… But that does not make the substitution provisions a sham.” (In contrast, the Employment Tribunal in Uber, found that the contractual provisions were a sham, and did not reflect the high degree of control that Uber exercises over its drivers.

Conclusion

The Panel Chair, Her Honour Judge Stacey (whose background is that of an Employment Tribunal judge), was very aware of the satellite litigation going on about worker status in the gig economy, when handing down the CAC’s judgment. Thus she commented: “The factual situation in this case is very different from, for example, that of Uber private hire drivers, or Excel or City Sprint.”

The Deliveroo situation is quite extraordinary, and can be distinguished from some instances, on its facts:

IWGB made its application in November 2016. Deliveroo fundamentally changed its contracts, issuing new contracts to its riders in May 2017. The CAC considered the later contracts only, but noted that: “The contractual terms under the Earlier Contract, and in practice, were markedly different and involved much more control and direction by Deliveroo – strict uniform requirements, a different attitude to substitutes and in other, significant respects.” Therefore, it is possible that under the Earlier Contract, at least some of the Deliveroo riders would have been found to have been workers. Meanwhile, the CAC judgment re-emphasises that the first step in the defining of any business to staff relationship is the written contract itself.

The CAC’s decision about the right to substitution and therefore worker status was unequivocal. However, it was not without a little hesitation, which the CAC called the “substitution conundrum.” Deliveroo’s lack of control, due to the seemingly very flexible business model that it imposed was a bit of a puzzle to the CAC Panel members. For example, how could Deliveroo’s health and safety obligations be met, when any person could stand in as a substitute for an otherwise trained, equipped Deliveroo rider before or during a job? Deliveroo’s counsel dealt with this question, by stating that is was not the CAC’s role “to judge the sense or otherwise of the business model.”

Deliveroo is perhaps most similar to Pimlico Plumbers, whose appeal against worker status is due to be heard in the Supreme Court in 2018. In Pimlico Plumbers, the issue of substitution was also key. So we have not heard the last on worker status, or about the right to substitution, as an indicative factor which points away from the likelihood of a finding that an individual amounts to a worker, yet.

 

[1] Please see our Employment e-briefing earlier this month, “Uber Appeal Fails: what next for Uber?” http://www.prettys.co.uk/uber-appeal-fails--what-next-for-uber-/2294

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