the Limits of Worker Status – Deliveroo

Regular readers of this blog will be aware that 2021 has been a good year for employment rights in the ‘Gig’ economy. The Supreme Court judgment in the Uber taxi drivers’ case in February confirmed that Uber drivers have worker status and are therefore entitled to holiday pay, sick pay, and the National Minimum Wage. In April, the Court of Appeal made similar findings in favour of workers employed by the courier Company Addison Lee.

This run of success has come to an abrupt end in a trade union recognition case being brought by the Independent Workers Union of Great Britain (IWUGB) against the food delivery company Deliveroo. The case concerns the IWUGB’s application to become recognized for collective bargaining with Deliveroo on behalf of delivery workers in North London (Camden & Kentish Town). The Central Arbitration Committee (CAC) turned down the union’s original application on the grounds that Deliveroo’s deliverers are independent contractors rather than having worker status.

At which point, you may rightly ask, why does the law regard Uber drivers as workers but Deliveroo deliverers as independent contractors? The answer relates to something called the right of substitution. This concerns the ability of a worker to sub-contract their job to somebody else. Uber drivers do not have this right for the practical reasons that they and their vehicle have to be licensed and registered with the Company. However, Deliveroo deliverers do have a right of substitution which means that I could accept and be paid for a job with Deliveroo, but the actual delivery work could be carried out by my daughter, my best friend or my Uncle Bert.

The CAC’s decision effectively denied the deliverers the right to collectively organise in their workplace and the IWUGB has appealed against the decision. However, this week the Court of Appeal found that the CAC decision was correct. Although the right of substitution is rarely used in practice the Court of Appeal found that its existence was sufficient to find that the deliverers cannot be regarded as workers and therefore cannot be unionised with no working status.

The Court of Appeal decision does create a significant loophole which a number of Gig economy employers may now try to jump through. If the legal duties and responsibilities of worker status can be avoided by creating a contractual right of substitution (even if this is more apparent than real) we can expect these clauses to crop up in contracts elsewhere.  

Ultimately this is likely to be bad news for workers. The presence of trade unions in a workplace can achieve many things including better pay and working conditions and the enforcement of health and safety standards. This is a fact worth pondering the next time you are nearly knocked off the pavement by a helmetless Deliveroo deliverer.

This blog was prepared by Mark Alaszewski, Solicitor at didlaw