Employment Status: The Independent Workers Union of Great Britain v The Central Arbitration Committee and Roofoods Ltd t/a Deliveroo [2021] EWCA Civ 952:

Under s.296 of the 1992 UK Trade Union and Labour Relations (Consolidation) Act [1], a worker is defined as a person who works, or seeks to work under a contract of employment, or under a contract whereby they personally undertake work or services for another party to the contract who is not a professional client. Similarly, under s.230(3) of the UK Employment Rights Act of 1996 [2] , a worker is a person who undertakes a contract to carry out work or services for another party to a contract who is not a client or customer of any business undertakings of that person. 

            Indeed, not every individual who engages in work for a company can be regarded as a ‘worker’, as seen in many cases before the courts worldwide. Employment status can be a contentious issue, particulary within companies operating within a so-called  gig economy. One such company is that of Deliveroo. Deliveroo, an online food delivery company operating in over two hundred locations across the world employs ‘riders’ to transport food orders to consumers. In June 2021, the UK Court of Appeal, in an unanimous judgment, dismissed an appeal taken by the Independent Workers Union of Great Britain (‘IWGB’), following adjudication in both the Central Arbitration Committee and the High Court, wherein it was held that Deliveroo drivers, are self-employed workers [3]. 

            The IWGB brought a case before the Central Arbitrations Committee (‘CAC’) in 2017, wherein they were refused permission for collective bargaining rights for Deliveroo riders on the basis that they were not classified as ‘workers’ under the legislative definitions because they were under no obligation to perform the work by themselves [4]. The key finding by the CAC was that the contract entered into by Deliveroo riders contained an absolute right of substitution, meaning that if they so wished, a contracted rider could engage someone else to carry out their duties [5].  This was appealed by the IWGB to the UK High Court wherein the decision of the CAC was upheld [6]. Ultimately, the case proceeded to the Court of Appeal, where it was concluded that the CAC were correct in their initial determination. In his judgment, Lord Justice Underhill [7] referred to paragraph 13 of the ILO R198 [8], wherein it is stated that in order for the relationship to be that of employee and employer, the work must be carried out by the individual engaged in the contract only. On that basis, in his view, the CAC was entitled to rule that Deliveroo riders are not ‘workers’. 

This decision by the Court of Appeal has been noted as somewhat controversial given the recent ruling by the UK Supreme Court decision in Uber v Aslam [9]. It should be noted that the Court of Appeal did consider the decision of the Supreme Court in Uber, however since the primary matter in this case was to do with union representation and not employment status, it was deemed irrelevant [10]. 

            The issue in Uber related to whether private-hire drivers who provided their services via the Uber app, could be labelled as ‘workers’ under the wording of the Employment Rights Act 1996. It was held in the judgment of Lord Leggatt that the English Employment Tribunal was correct in their findings that Uber drivers were, in fact, under contracts of employment with Uber. Despite Uber drivers determining when and where they carried out their work, they could be deemed as ‘workers’ because their renumeration was fixed by Uber; the contractual basis on which the drivers operated was determined by Uber; Uber held discretion to accept or decline requests for trips and holds the power to monitor a driver’s rates of acceptance and cancellations for trips; Uber exercised a significant degree of control over the manner in which drivers provided their service, including the types of car used and routes taken; and lastly Uber restricts communication between the driver and the passenger [11]. This level of control exercised by Uber over its contracted employees was deemed substantial enough to regard them as workers.  

            The key reason the decision of the court in the Deliveroo case appears to be so controversial is because of the striking similarities between the two companies in their manner of operations, yet the completely opposite rulings as regards the status of their employees. However, the fact that Deliveroo’s contracts with its riders contained a substitution clause, whereas Uber’s did not, was what enabled the CAC, the High Court, and the Court of Appeal to come to their conclusions that Deliveroo riders could not, under the legislative definitions, be classified as ‘workers’.   

Under Deliveroo’s substitution clause, a rider contracted with Deliveroo can, if they so wish, appoint a third party to work on their behalf for Deliveroo [12]. Referring back to the relevant legislation, it is a standard requirement that in order to be classified as a ‘worker’ under UK law, the work must be carried out solely by the individual engaged in the contract of employment. So whilst Deliveroo may dictate certain contractual requirements to their employees, such as safety requirements or service standards, it does not dictate when, where how or even by whom the work is to be carried out –and furthermore, it imposes no obligations on the riders to actually do any work. On that basis, Deliveroo cannot be reasonably be said to be exercising a substantial degree of control over its contracted employees, and as a result, Deliveroo riders are self-employed.

What this means for the future of the law as regards employee status in companies operating within a gig economy is unclear. Despite the fact that the primary issue in this case pertained to union representation, it is highly significant decision in the realm of employment law and will likely have a large impact on future litigation relating to employment status within gig economies. 

References:

[1] The UK Trade Union and Labour Relations (Consolidation) Act 1992, available at <https://www.legislation.gov.uk/ukpga/1992/52/contents>.

[2] The Employment Rights Act 1996 ,available at <https://www.legislation.gov.uk/ukpga/1996/18/contents>.

[3] The Independent Workers Union of Great Britain v The Central Arbitration Committee and Roofoods Ltd t/a Deliveroo [2021] EWCA Civ 952.

[4] CAC Outcome: Independent Workers Union of Great Britain v Roofoods Ltd t/a Deliveroo [2017] TUR1/985, judgment available at <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/663126/Acceptance_Decision.pdf>.

[5] ibid, at paragraphs 100 – 103.

[6] The Independent Workers Union of Great Britain v The Central Arbitration Committee [2018] EWHC 1939; [2018] 6 WLUK 313.

[7] The Independent Workers Union of Great Britain v The Central Arbitration Committee and Roofoods Ltd t/a Deliveroo [2021] EWCA Civ 952, at paragraph 77.

[8] Employment Relationship Recommendation 2006, n.198, at page 4, paragraph 13, available at <https://www.ilo.org/legacy/english/inwork/cb-policy-guide/employmentrelationshiprecommendationno198.pdf>.

[9] Uber v Aslam [2021] UKSC 5; [2021] 2 WLUK 262. 

[10] The Independent Workers Union of Great Britain v The Central Arbitration Committee and Roofoods Ltd t/a Deliveroo [2021] EWCA Civ 952, at paragraph 84.

[11] Uber v Aslam [2021] UKSC 5; [2021] 2 WLUK 262, per Lord Leggatt, paragraphs 93-100. 

[12] CAC Outcome: Independent Workers Union of Great Britain v Roofoods Ltd t/a Deliveroo [2017] TUR1/985, at paragraph 54.