UK Supreme Court rules Deliveroo riders are not employees

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The UK Supreme Court has ruled that Deliveroo riders cannot be recognised as employees or represented by trade unions for collective bargaining, in a landmark decision for the gig economy.

The Independent Workers’ Union of Great Britain (IWGB), which has the largest membership of app-based couriers in the UK, had fought the case for more than seven years on behalf of tens of thousands of Deliveroo riders.

In a unanimous judgment on Tuesday, five judges said the contracts between riders and the company did not constitute an “employment relationship” because riders were able to use another person to cover their deliveries without Deliveroo’s involvement.

“Riders are thus free to reject offers of work, to make themselves unavailable and to undertake work for competitors,” it said. “Once again, these features are fundamentally inconsistent with any notion of an employment relationship.”

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Deliveroo said the decision was a “positive judgment” for its riders, adding that “thousands apply each week to work with Deliveroo because they want to be able to decide for themselves when, where and whether to work”.

“We are proud to be able to offer tens of thousands of riders this flexibility alongside the security of free insurance, sickness coverage, support for new parents and a unique union recognition agreement,” it said.

The case was first dismissed by the Central Arbitration Committee in 2017, when the labour law body found that riders were self-employed because they could substitute somebody to complete their order for them.

The IWGB filed an appeal through the courts, taking the case to the highest level, the Supreme Court, in April.

The IWGB described the ruling as a “disappointment”. “We cannot accept that thousands of riders should be working without key protections . . . and we will continue to make that case using all avenues available to us,” it said.

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Yvonne Gallagher, partner at law firm Harbottle & Lewis, said the judgment was a “fundamentally important ruling for the gig economy, not just for Deliveroo”.

“In establishing that the substitution clause [allowing workers to use others to complete their orders] works as a proof that riders cannot be considered workers,” she added, “the Supreme Court ruling may give rise to other gig economy companies following the Deliveroo employment approach — where it fits their commercial model.”

Deliveroo has yet to start generating positive free cash flow. Pre-tax losses at the London-based company narrowed from £127.1mn in the first half of last year to £57.6mn in the first six months of 2023, as revenue grew 5 per cent to £1bn.

The company made £418.4mn of revenues outside of the UK and Ireland in the first half of this year, as lawmakers in Brussels have been discussing new rules to give greater employment protections to gig economy workers in EU member states.

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Under proposals agreed by the European Council, the EU’s executive body, companies that control workers’ hours, what they wear at work and restrict whether they can accept or turn down work will have to class them as employees.

Deliveroo ceased operations in Spain almost a year ago after the country amended laws to give gig economy workers rights including collective bargaining.