Employment Law Cases

Independent Workers’ Union of Great Britain and RooFoods Ltd (t/a Deliveroo)

Riders for Deliveroo are not ‘workers’ but rather independent contractors according to a ruling by the Central Arbitration Committee.

The Central Arbitration Committee (CAC) is an independent body which deals with the statutory recognition of trade unions, disclosure of information in collective bargaining, information and consultation and European works councils.

The Independent Workers Union of Great Britain (IWGB) applied to the CAC to be recognised for collective bargaining purposes by Deliveroo. This was seen by some as an indirect means of establishing ‘worker’ status for the couriers – and thus winning them certain employment rights such as entitlement to the minimum wage and paid holiday. It’s also generally a quicker process than going down the employment tribunal route. Under the Trade Union and Labour Relations (Consolidation) Act 1992, a trade union must consist ‘wholly or mainly of workers’. So, by seeking union recognition, the CAC would have to determine the issue of worker status. Trade union recognition is not available to genuinely self-employed contractors.

CAC decision

On 14 November the CAC rejected IWGB’s claim for recognition. In essence, the CAC decided that the couriers are independent contractors. Why? Because they had the right to allocate a substitute to do the work for them.

Deliveroo has recently made changes to its contractual arrangements with couriers, including allowing them to bring in someone else to cover their work (as well as removing performance monitoring and the requirement for couriers to wear branded clothing). The new contract involved less direction and control by Deliveroo than under the previous contract.

The significance of this substitution element is that a ‘worker’ is defined as someone who works under a contract of employment or ‘any other contract, whether express or implied ... whereby the individual undertakes to do or perform personally any work or services for another party to the contract’. If the couriers don’t have to perform the work personally, they cannot legally be ‘workers’. The CAC specifically found that the substitution right was genuine and there was evidence of it being operated in practice, albeit rarely. This was fatal to the union’s claim for recognition.

Link to decision: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/659481/Acceptance_Decision.pdf

Comment

Coming after the Uber decision in the EAT and other cases, this has muddied the waters somewhat. However, simply inserting a substitution clause is no magic bullet. The CAC stated that the factual situation in the Deliveroo case was very different from, for example, that in the City Sprint case where the tribunal held that the substitution clause was a sham.

It’s reported that an employment status claim has already been lodged at the tribunal on behalf of 45 Deliveroo riders. While CAC decisions do not set a precedent (and don’t bind employment tribunals), this CAC decision could be of persuasive value. Each case will however continue to be decided on its own specific facts.

Employment tribunals tend to take a multi-factorial approach to determining employment status with no single factor being determinative. As well as personal service, they will look at such issues as control, mutuality of obligation, integration into the business, business dependency and the degree of financial risk borne by the individual.