In considering an application for statutory trade union recognition, the Central Arbitration Committee (CAC) had to consider whether delivery riders engaged by Deliveroo were workers. If they were not, the application would fail.

The CAC concluded that the riders were not workers on the basis that there was a genuine, almost unfettered right of substitution. This meant that there was no requirement to perform the work personally and the worker test had not been satisfied (Independent Workers' Union of Great Britain v RooFoods Limited t/a Deliveroo).

Background law

Independent trade unions can apply to be recognised by an employer to conduct collective bargaining on behalf of a group of workers (known as the bargaining unit). They initiate this process by asking the employer to voluntarily recognise them. If the employer resists, then they can make a formal application for recognition under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) (known as the statutory recognition procedure).

For the purposes of the TULRCA, "worker" means an individual who works, or normally works or seeks to work:

(a) under a contract of employment (i.e. an employee); 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; or (c) in employment under, or for the purposes of, a government department in so far as such employment is not covered by the other categories.

(Section 296, TULRCA)

The limb (b) definition of worker in TULRCA is similar to that used in Section 230(3) of the Employment Rights Act 1996 (ERA). There, a limb (b) worker is described as: "an individual who has entered into or works under…any other contract, whether express or implied and whether oral or in writing whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual."

Under both pieces of legislation, worker status is achieved where work is performed under a contract, it is performed personally for another party to the contract, and that other party is not a client or customer of the individual. Therefore, if an individual is a worker under one, it is likely they will be a worker under the other.

In this case, Independent Workers' Union of Great Britain (IWGB) made a request to Deliveroo to recognise them for collective bargaining purposes, in respect of a bargaining unit comprised of motorbike drivers and bicycle riders (Riders). In order for the application to succeed, it would need to be shown that the Riders satisfied the definition of "worker" under TULRCA. If they did, then there would be a good chance that they would also be viewed as workers for the purposes of the ERA (and other pieces of employment legislation using similar definitions). This would entitle the Riders to employment rights such as the right to rest breaks and paid annual leave, the right be paid the national minimum wage and the right to be automatically enrolled into a pension scheme.

Facts

Deliveroo's business involves the delivery of food and drink items for restaurants and others to customers' homes or other premises. It enters into "supplier agreements" with Riders who deliver the food and drink items.

The Independent Workers' Union of Great Britain (IWGB) made a request to Deliveroo to recognise them for collective bargaining purposes. The request related to a bargaining unit comprising Riders in the Camden zone. Of Deliveroo's 4,500-strong workforce, only 100 fell within the proposed bargaining unit.

Deliveroo rejected the request on the grounds that:

  • the Riders were not workers;
  • the IWGB did not represent the views of the Riders nationally; and
  • the proposed bargaining unity was inappropriate and not compatible with effective management.

The IWGB then submitted an application for statutory recognition under TULRCA. A panel of the Central Arbitration Committee (CAC) was convened to decide whether the application should be accepted. A key question was whether the Riders were workers. If they were not, then the application could not be accepted.

Deliveroo's position was that no-one within the proposed bargaining unit (or, indeed, anyone that it engaged to perform deliveries to customers) was a worker within the meaning of section 296 of TULRCA. Rather, Deliveroo considered these individuals were engaged as "suppliers".

Decision

In considering whether the Riders had workers status, the CAC considered the following evidence:

Recruitment

The recruitment process, known as "onboarding", involved several stages including: the completion of an online application form; a telephone interview; a trial delivery session where bike riding competency was assessed; completing an online training course and scoring 100% in a number of multiple choice tests. The process also emphasised that the Riders were the "face of Deliveroo" and advice was given on customer service, food hygiene and health and safety.

Once accepted as a Rider, the individual was required to sign a "Supplier Agreement" and purchase an equipment pack of £150 (which was refunded when the Rider stopped working for Deliveroo if returned in good order).

Substitution

On 11 May 2017, a few weeks before the CAC hearing, Deliveroo revised the Supplier Agreement (the New Agreement). The New Agreement was issued to all existing Riders, together with a covering letter which emphasised that Riders were entitled to appoint another person to work on their behalf with Deliveroo at any time. The substitution clause itself provided that the Rider could appoint a substitute without Deliveroo's prior approval. There was no policing of a Rider's use of a substitute. The only restrictions were that they: (i) could not appoint an individual who had been terminated by Deliveroo for a serious breach of contract (or had engaged in conduct that would have been grounds for termination had they been directly engaged by Deliveroo); and (ii) had to notify Deliveroo if the substitute used a different type of vehicle. The rider was responsible for the payment of the substitute.

In practice, however, substitution was rare as if a rider did not want to accept a job or be available for work, he or she would simply not log on to the app, or if logged on, they would mark themselves as unavailable. Even when they were logged on and marked as available, they were not obliged to accept a job offered to them (and if they didn't accept a job offered to them within 3 minutes, it was offered to another rider). There were no adverse consequences for Riders not accepting jobs.

Other noteworthy factors

  • Riders were free to work for other companies including competitors.
  • Riders were not required to wear a Deliveroo uniform when working for Deliveroo.
  • Riders were free to choose their own delivery routes, although there were some restrictions around delivery times (i.e. they couldn't take too long).
  • Riders were responsible for providing roadworthy delivery equipment and obtaining third party liability insurance for themselves and any substitute they appointed.
  • In terms of payment, invoices would be submitted on a fortnightly basis in respect of services provided by the Rider or their substitute in the previous fortnight. The New Agreement provided that the Riders were responsible for accounting and paying their own tax and national insurance. Deliveroo did not provide a pension or any other benefits.
  • Riders were not required to indicate in advance when they intended to work and were not subject to any form of schedule. They were free to log in and out of the delivery app at times of their choosing. The only requirement was that they performed at least one delivery every three months.

The CAC rejected the application for statutory recognition on the grounds that the Riders were not workers for the purposes of section 296 of TULRCA. It found that the substitution right was genuine and there was evidence that it had been used, albeit rarely, in practice. This finding meant that it could not be said that the Riders undertook to work or provide services personally for Deliveroo. This meant that the definition of "worker" was not satisfied.

Notably, the CAC concluded: "By allowing an almost unfettered right of substitution, Deliveroo loses visibility, and therefore assurance over who is delivering services in its name, thereby creating a reputational risk, and potentially a regulatory risk [in relation to health, safety and food hygiene], but that is a matter for them. The Riders are not workers with the statutory definition of either s.296 TULRCA or s.230(3)(b) of the Employment Rights Act 1996".

This decision bucks the trend seen in recent cases involving employers such as Uber, Pimlico Plumbers, Addison Lee, Excel and CitySprint, where ostensibly self-employed individuals were found to be workers. It seems clear that the differentiating factor in this case was the presence of a genuine and largely unfettered right of substitution. Whilst this created other risks for Deliveroo, it meant that the personal service requirement had not been met.

It's worth remembering that the recent Taylor Review on Working Practices recommended that the Government prioritise replacing the existing worker status with a new status of "dependent contractor", which would carry with it a different threshold test. The Review recommended that much greater weight should be placed on the principle of control, than on the requirement for personal service. It went on to say that the absence of a requirement to work personally should not be an automatic barrier to accessing employment rights as a dependent contractor. The Review said this this would "make it harder for employers to hide behind substitution clauses". This recommended approach has been endorsed by the House of Commons Work and Pensions and Business, Energy and Industrial Strategy Select Committees in their joint report entitled "A framework for modern employment".

However, in this case, it is not clear whether a focus on control would have generated a different outcome. The Riders had a fairly high degree of autonomy in their day to day activities – they were free to work for other companies, they didn't have to wear a uniform, they could choose when to work and they could choose their own delivery routes.