This week, a decision of the Central Arbitration Committee (CAC) that Deliveroo riders are not workers became the latest development in the ongoing saga of ‘gig economy’ cases.
The Deliveroo case is unusual in that it was not taken through the traditional Employment Tribunal route. It concerned a group of Deliveroo riders in Camden who had joined the Independent Workers’ Union of Great Britain. The Union made an application to the CAC for recognition so that it could engage in collective bargaining on terms and conditions of employment with Deliveroo on behalf of the riders. For it to be awarded recognition, it had to be decided whether the riders fell within the definition of ‘worker’ for the purposes of trade union legislation.
The CAC found that in respect of other requirements for recognition, such as the required amount of support amongst workers, the Union had succeeded in meeting the relevant criteria for recognition. However, it could not be recognised as the riders were not found to be workers.
The key to this finding was a clause in the contract with riders – which was added by Deliveroo relatively recently – which allowed them to send a substitute to carry out work in their place. The definition of worker requires that the person concerned provides the service they are contracted for ‘personally’, so being able to have someone else perform the services is not compatible with this definition.
This did cause some controversy with the CAC, as they noted that Deliveroo went to great lengths in terms of recruiting and training drivers and carrying out background checks. Allowing the riders to have anyone take over from them appears to fly in the face of these procedures. It was also discussed that providing a substitute was not particularly necessary or desirable, given riders could choose when to switch the app on and therefore when they were available. However, there was evidence of at least one rider who had an arrangement with friends to substitute for him and he would take a cut of the payment for that time.
The concern was raised that Deliveroo had inserted this substitution clause, which was not necessary and contradicts their working procedures, simply in order to avoid its riders being classed as workers. However, the CAC found that the right to substitute was a right which could be exercised and there was evidence of it being used, which was fatal to the argument that the riders were workers.
This decision bucks the recent trend of recent Employment Tribunal judgments which have tended to find that people working for these type of companies are in fact workers, who are entitled to certain employment rights such as holiday pay and the minimum wage. Indeed, earlier this month Uber lost its appeal against the Employment Tribunal’s decision that its drivers are workers.
However, there is caution in this tale for employers who engage people on similar terms. Although the substitution clause was the main issue in this particular case, what will always be considered is the reality of the situation and how an individual carries out their work in practice. The Employment Tribunal can look behind the written terms of a contract to see how working relationships function in reality, and it is evidence on these practical arrangements upon which claims will be determined, rather than a meek acceptance of what is stated in the contract.
In the Uber case the tribunal levelled a high degree of criticism at Uber in respect of the lengths they had gone in their contracts to twist the reality of the position, making it clear that simply adding clauses to contracts will not of itself avoid individuals being classed as workers.
The CAC’s decision is not necessarily the end of the matter for Deliveroo. It should be remembered that this decision only considered the position for trade union purposes and was not in relation to other rights which workers are entitled to, albeit the definition of worker in other legislation is similar. There is an Employment Tribunal case still to be heard which has been brought by forty five Deliveroo riders seeking rights as workers, and it remains to be seen whether the employment tribunal will agree with the decision of the CAC or whether its view of the matter might be different. The government’s ongoing review of worker status may also mean Deliveroo and similar companies still have further battles to come.