Consequences of Deliveroo employment verdict

SME Publications/ SME XPO 2024

By Kate Palka, below, Lawyer at The Legal Director

In November, the Supreme Court came to a verdict on the Deliveroo case – deciding that Deliveroo riders are not employees, and therefore are not able to reap benefits from union protections. It is not just Deliveroo riders that will feel the effects of this decision though, as the results will likely impact other businesses who operate within flexible working models.

The gig economy

Employment status in the gig economy has been in and out of the spotlight for years, and as new platforms have come in, courts and tribunals have had to set out guidelines and considerations that should be taken into account when deciding whether someone falls into the category of ‘worker’, ‘employee’ or genuinely self-employed. Despite the initial self-employment model, successful challenges in cases like Uber and Pimlico Plumbers have granted certain gig economy workers employment rights. These rights range from being granted the national minimum wage, the rights to unionisation and union protection and wider discrimination protection.

The big difference in the Deliveroo case was that workers had an “almost unfettered” right to share their work, and were able to assign their tasks to others – with no obligation to complete their own orders. This ultimately lost their case. 

What should other businesses learn from this?

Following this case, employers who offer flexible working arrangements should revisit their contracts and ensure that they have clearly included an unconditional right of substitution, as this should help mitigate cases of workers asking for certain employee rights.

Similarly, it should be made clear whether or not workers are permitted to work at their convenience, without set times, and will not be reprimanded if they choose not to pick up work on a given day – or if they are allowed to work for other competitors alongside their current role. These two points are key in assessing the nature of the relationship between the worker and the business and will massively impact a decision on employment status. 

Is change on the horizon? 

The UK government has no legal obligation to follow changes made to EU laws since Brexit, but the Deliveroo case here (alongside a similar Dutch case that found Deliveroo riders to be employees, and a ‘Riders Law’ being implemented in Spain) has prompted conversation surrounding whether or not enough is being done to protect gig economy workers, and whether we need to take action to do more.

The Labour party have pledged reforms to create a single ‘worker’ status, that would work as a blanket cover for everyone other than self-employed. They’ve also proposed to put an end to zero hour or contracts without guaranteed hours. If these changes were to come into force, the gig economy, and the employment world as a whole, would see significant implications.

In terms of other changes we may see this year, the Workers (Predictable Terms and Conditions) Act 2023, which is expected to come into force in September, aims to help workers with unpredictable working patters request more clarity and better schedules from their employer. Whilst primarily aimed at zero hours contracts, it is possible that other arrangements and working patterns will fall into this Bill too.

Although this will only apply to workers (not the genuinely self-employed), it highlights why now is a good time for employers to revisit their contracts and ensure they are up-to-date, in line with new working ways in the ever-changing employment space.

SME Publications/ SME XPO 2024