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If you are a takeaway aficionado you may well have recently used the services of ‘Deliveroo’. If you prefer to make use of your own kitchen, Deliveroo is a website where customers can order from a selection of their favourite restaurants to be delivered to their door by one of their trusty bicycle couriers. Whether you’re craving a YO! Sushi, or whether you’re more in the mood for a ‘Large Whopper’ from Burger King, with just a few clicks (and a £2.99 “Roo Charge”), a courier will be on his/her bike, weaving in and out of traffic to deliver your dinner.

However, while Deliveroo may deliver your favourite meal, they don’t deliver when it comes to employment rights. It has been reported this week that the couriers are not treated by the company as employees or workers. Rather they are treated as self-employed. Deliveroo is one of a number of companies receiving media coverage recently for their use of self-employed individuals, who have fewer rights than staff members. Hermes, the parcel delivery company, was also recently reported to treat its couriers as self-employed. Meanwhile, there is an on-going employment tribunal claim by so-called self-employed Uber drivers at the Central London employment tribunal. Uber, which operates the mobile app allowing customers to request a taxi, is facing a legal challenge by some of its drivers who claim they are in fact employees. Uber claim it is not acting unlawfully, arguing that it is a technology company rather than a transport provider, working with “driver partners” and offering them flexibility to control how much and often they work. A decision is expected in the coming weeks.

There has been significant negative press coverage around such arrangements. Many important legal rights only apply if an individual is an employee or (to a lesser extent) a worker. Under a self-employed arrangement, the individual will not benefit from statutory holiday entitlement, sick pay, pension rights, statutory minimum notice periods, or even National Minimum Wage. Indeed it has been reported that some Hermes drivers have claimed they effectively earn below the NMW level. Furthermore and crucially there will be no protection from unfair dismissal. Many argue that such arrangements rig terms in the interests of businesses, exploiting individuals and leaving them insecure and powerless. They are also often seen as part of a “race to the bottom” in relation to employment rights or even an instance of the “unacceptable face of capitalism”.

The companies which make use of the arrangements argue that they offer the individuals flexibility as, in theory, they can pick and choose when they work in order to suit their needs. Such arrangements may in fact suit certain people, such as students, who may find the flexibility appealing when taking into account their other commitments. Furthermore, it may be seen to benefit those who wish to supplement other income More generally such form of engagement can be seen as part of burgeoning “gig economy” whereby individuals and businesses engage on a short term, flexible basis for particular projects to their mutual advantage Such arrangements have traditionally been used in the oil and gas and IT sectors where it can be an attractive option for both company and individuals (commonly referred to as “consultants”), in part because of the tax advantages associated with self-employed status. However, traditionally higher reward rates in those sectors means there is not the same controversy as is associated with the arrangements applied to more low-skilled individuals referred to above.

It should be noted that the fact that a contract is structured and documented as a “self-employed” arrangement and not a contract of employment will not be conclusive as a matter of employment law. It is not enough for a company to simply label an individual as self-employed for them to become so. If the reality of the arrangement actually reflects an employment relationship, then individuals can be ruled de facto employees. There is no single test for determining employment status. A number of criteria have emerged from case law that is traditionally considered when deciding whether a person can be said to be an employee. However, there are three fundamental conditions that must be met for an employment contract to exist; (1) the individual must provide his/her own skill and work in return for pay; (2) there must be a sufficient degree of control of the individual’s activities; and (3) the other provisions in the contract must be consistent with it being a contract of employment. This is what the Uber drivers are arguing in the tribunal claim referred to above.

In relation to the Deliveroo cyclists, there is reported to be clauses in their contracts which set out; “You further warrant that neither you nor anyone acting on your behalf will present any claim in the employment tribunal or any civil court in which it is contended that you are either an employee or a worker”. The contract then goes on to state that if such a claim is presented, the individual agrees to “indemnify and keep indemnified Deliveroo against costs (including legal costs) and expenses that it incurs”. This wording is clearly an attempt by the company to prevent individuals raising tribunal claims. However, it should be noted that such a clause would likely be ineffective if the individual was found by a Tribunal to have actually attained employee or worker status. Any attempt to limit or exclude the rights of an employee or worker will be void under the Employment Rights Act.

If you would like advice in relation to such arrangements, please contact a member of our Employment team.

Rowan Alexander, Solicitor

Chambers Leading Firm 2019

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