The facts

In 2016, the Independent Workers' Union of Great Britain submitted an application for recognition to the Central Arbitration Committee (the CAC) for recognition for collective bargaining in respect of riders in the Camden zone. Deliveroo argued that the application could not be accepted because the drivers were not workers. It also argued that other conditions for acceptance were not met (this alert does not cover these arguments).

The CAC had to consider whether or not these drivers were workers. The definition of "worker" under the legislation relevant to statutory recognition is "an individual who works, or normally works or seeks to work a) under a contract of employment, or b) under any other contract whereby he undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his". This definition is very close to the definition of "worker" in relation to other worker's rights (e.g. the right to paid holiday and to receive the National Minimum Wage).

The key question for the CAC was whether the drivers are obliged to perform services personally. Case law has shown that, where there is a genuine and unfettered right of substitution, the individual is not obliged to perform services personally, and will not therefore be a worker.

The Deliveroo riders' contracts contain a number of provisions about substitution, including:

  • Riders may provide a substitute, who may be employed or engaged directly by the rider, to perform the delivery. There is no need to obtain Deliveroo's approval, or even inform them, unless the substitute is using a different vehicle type, which might affect delivery times.

  • There are a few restrictions on who the substitute may be, including where they are former Deliveroo riders who have had their contracts terminated for material breach.

  • It is the riders' responsibility to ensure that the substitute has the necessary skills and training. The rider remains responsible for performance.

  • The rider would be paid for the work and any arrangements for paying the substitute are between the rider and the substitute.

There was evidence of this right of substitution being used in practice, one individual having subcontracted work for a 15-20% share in the delivery fee.

The CAC found that this was a genuine and almost unfettered right of substitution. The riders were not therefore obliged to provide services personally, and they were not workers.

What does this mean for employers?

As the CAC commented, the factual situation in this case was very different from the Uber case. With the Deliveroo riders, the issue was whether or not the riders were obliged to provide services personally. This has not been in serious dispute in the other recent cases about worker status. Had the Uber contracts contained a genuine and unfettered right of substitution, the drivers would not have been workers. It is worth noting that this was a CAC case, so not binding on Employment Tribunals.

Employers often include substitution clauses in contracts with their service providers. However, if the right to substitute is not genuine, the mere inclusion of the clause in the contract will not be sufficient to avoid worker status.