Deliveroo Delivers Employment Law Issue

If you have ever used apps like Deliveroo, UberEATS Just Eat or Grubhub, you are part of a revolution in the food industry. The disruptive technology of online food apps has sped up not only a consumer’s access to food but also sped up changes in the working environment. It has also raised the question of how the companies behind this revolution pay and categorise their staff, particularly their delivery drivers. As a result, employment law is learning to adapt to and evolve with these changes.

Food Revolution

This food revolution is based around convenience, speed and giving consumers a choice. It allows the consumer to choose between either the hassle of shopping for ingredients, then preparing and then cooking dinner, often after a commute home from work, or placing a food order from a mobile phone and only waiting for their food to be delivered straight to their front door. Similarly, it provides the choice between either navigating the additional time and cost of eating in a restaurant or being served the restaurant in your sitting room.

This revolutionary mega-trend is so pervasive and expansive that research by Swiss investment bank UBS, predicts the death of home-cooked food. Their research, ominously entitled ‘Is the Kitchen Dead?’, shows that the activity of cooking at home has a fast-approaching expiry date. Instead, 10 years from now, meals will be mostly ordered online and delivered from either a restaurant or a specially designed and centralised hub-kitchen. To place that in monetary terms, currently, the food delivery app business is a $35 Billion worldwide industry. By 2030, it will be a $365 Billion industry.

Delivery Drivers and Employment Law

There are two drivers in this mega-trend. First, time-pressed Millennials, the majority of whom are more likely to order meals online than anyone else, and second, the delivery drivers who form a pivotal role in this disruptive model.

These delivery drivers are now part of the evolving definition of who is and what does a worker do. From Think Tanks to government departments in many countries, terms like ‘Future Work’, ‘Platform Work’, ‘Gig Economy’ and ‘Bogus Employment’ are being discussed. A crucial part of that discussion is how employment law evolves to keep pace with new models of work which are potentially wrong-footing social standards, such as the minimum wage, paid annual leave, essential sick leave and maternity and welfare rights.

Deliveroo and Ireland

Ireland is no stranger to this mega-trend or the legal questions it poses. A relevant example for Irish purposes is the food app Deliveroo. Deliveroo, a UK company boasting significant Amazon investment, has recently in different European jurisdictions been a party to litigation centring around the employment status of Deliveroo delivery riders. It is hard not to envisage that the doorbells of the Workplace Relations Commission or the Labour Court will sooner rather than later be ringing with the request for them to deliver their recipes as to how to categorise delivery drivers. Perhaps in anticipation of this, Deliveroo’s Irish General Manager recently asked the Irish Government to modernise Irish Employment law to better cater for self-employed workers.

Key Employment Law Issue

The critical issue is that Deliveroo positions itself as a champion of the flexibility and freedoms of the self-employed. Deliveroo argues that they give workers a chance to be independent and be their own boss while being under the umbrella of Deliveroo. Indeed, Deliveroo proposes that Ireland adopts a “charter for secure and flexible work”. They argue that doing so would enable Deliveroo to offer better benefits to their riders without changing their employment status. While this argument would appear to be legitimate as it echoes similar moves being undertaken by the French Government to establish such a charter, the delivery drivers and a growing number of legal forums outside Ireland disagree.

Deliveroo and Spain

Spain is a jurisdiction that has been actively tackling this issue. In fact, during this summer gone, no less than 3 cases were taken against Deliveroo, with each one ruling in favour of the delivery drivers.

In June 2019, the Social Court of Barcelona ruled that the status that Deliveroo placed on its delivery riders was “bogus” and that while the company’s championing of autonomy for riders was organisationally sound, the extent to which the company controlled its riders led the Court to view these delivery riders as employees, not self-employed contractors.

Again in June 2019, the Social Court of Valencia ruled that Deliveroo’s riders were not self-employed. The Court held that the determining factor in their decision was the nature of the delivery rider’s ‘platform work’. The riders function in a digital framework that provides them with vital information about where and what they deliver. It is platform work, a term used to describe a variety of employment styles that invariably involve online platforms, contracted-out labour and services provided on-demand. Essential to those riders performing this platform work is the information that drives and directs it. 

Deliveroo has sole control over this digital platform, and while riders offered their personal services, Deliveroo had absolute control over the assignment of deliveries and instructions given to riders. As such, the essential element that enabled Deliveroo’s successful business model to meet customer demand with supply was not the rider’s bikes and mobile phones (which the riders own themselves) but the digital platform that controlled where and to whom these riders delivered. Consequently, they were not self-employed.

A month later, July 2019 saw the Social Court of Madrid similarly ruling that Deliveroo’s control over branding, the online platform and all the information linked to it removed any apparent autonomy of the worker and created a relationship of employment.

Deliveroo in France and Germany

France, a country that knows a thing or two about strikes, revolution and food (French Gastronomy was awarded UNESCO status in 2010) has also witnessed disquiet amongst Deliveroo riders about the delivery of their employment rights. Last month, Deliveroo riders went on strike in response to the company’s attempt to lower the minimum pay in Paris to below a minimum of €4.70 per delivery. In the same month, Deliveroo on August 16th dramatically decided to end all of its operations in Germany. The reason for the exit was the level of competition in the marketplace, which is a timely reminder that Deliveroo is not the only provider in this market.

It is also a reminder because speed and price are key USPs for Deliveroo and Deliveroo’s competition; there will inevitably be a continued drive to provide cheaper food, faster. To stay competitive in this market, food app platform companies will either lower costs by lowering the wages and entitlements of their ‘workers’ (as Deliveroo did in France) or cut their losses and their labour force and leave for a more favourably priced market (as Deliveroo did in Germany).

The Future Landscape

While the recent Spanish case law may well be subject to appeal, it is informative in that they show a focus being placed not on how independent the delivery drivers are but to what extent these platforms control their ‘workers’.

The degree to which this impacts on similar rulings in Ireland is an interesting one to consider. However, legal waters closer to Ireland have delivered a different view on Deliveroo delivery riders. Recently, in the UK’s High Court, Deliveroo riders were refused employee status and as a consequence denied a right to collective bargaining.

The background to this decision against the delivery riders is that the Central Arbitration Committee excluded Deliveroo riders from the legal definition of workers because they’re able to ask other riders to make deliveries for them. Delivery riders are allowed to sub-contract their work, and the CAC interpreted this to mean that they don’t provide a ‘personal service’. The implications of the ruling were quite dramatic, as it meant that the Independent Workers Union of Great Britain failed in its efforts to force Deliveroo to negotiate salary, working hours and holidays benefits for riders.

However, the UK’s employment law does differ from Ireland’s in how it defines employment status. While Ireland has two categories, namely an employee or a self-employed contractor, the UK has three such categories, namely a worker, an employee and when someone is self-employed where they are in business for themselves while they contract to provide services to others. Perhaps the UK High Court’s ruling will be echoed in Ireland’s future approach to this issue. Alternatively, it might mean a window for Ireland to change how it categorises employment status.

The European Union

In the context of changing how Ireland categorises employment status, European Union jurisprudence might be of assistance. Admittedly the argument on the grounds of Article 11 of European Convention of Human Rights, as seen in the UK High Court judgment, didn’t prove fruitful. However, there have been two exciting developments in this area.

First, last year, the Court of Justice of the European Union (CJEU) determined in Case C?378/17 - Minister for Justice and Equality and The Commissioner of the Garda Síochána v Workplace Relations Commission, that the Workplace Relations Commission can dis-apply a rule of national law that is contrary to EU law. It is a decision which will have a significant impact on how and perhaps also who adjudicates cases in future.

Second, earlier this year, the EU Commission issued Directive 2019/1152 on Transparent and Predictable Working Conditions. The Directive intends to impose new minimum standards to ensure that all workers, including those on atypical contracts, benefit from more predictability and clarity as regards to their working conditions. 

However, while the case law of Article 45 Treaty on the Functioning of the European Union (TFEU) certainly provides essential guidance on what is the definition of a worker, a worker is not explicitly defined in EU Law. Also, the EC’s recent ‘Access to Social Protection’ initiative shows movements in the right direction, but the initiative is non-binding on Member States. The decision by the CJEU is one that might play a part in any such developments.

Ireland’s Solution

A persuasive assumption is that initial determination on employment status in this area in Ireland will be done so within the existing legal structures and the current reforms that are in the pipeline. Given the social security and tax implications of employment status, the Irish Revenue’s Code of Practice for Determining Employment or Self-Employment Status of Individuals in addition to employment legislation would be prominent frameworks for determining employment status.

Irish Legislative Re-boot

Before concluding this article, two very relevant bills are being debated in the Oireachtas.

First, currently at the Seanad éireann Fourth Stage, the Protection of Employment (Measures to Counter False Self-Employment) Bill 2018 will enable the WRC to determine the employment status of a worker. It seeks to protect workers such as Deliveroo delivery riders, in that it aims to clarify the employment status of those incorrectly designated as independent contractors.

Also, as proposed above, the Revenue guidelines on employment status play a key role in how this Bill seeks to determine employment status and adjudicate as to whether or not an employment relationship has been set up as a form of tax avoidance.

Second, currently at the Second Stage in Dáil éireann, the Prohibition of Bogus Self-Employment Bill 2018, intends to prohibit employers from entering into ‘bogus’ contracts for services, and enable the referral of complaints in this regard to the WRC. Importantly, the Bill sets down 19 grounds by which to define a bogus contract for services.

Conclusion

Fast food has long since been a guilty pleasure and for those who think of employment law even as they eat, the current issue of employment status in the food delivery industry provides food for thought. Two takeaways from this article are a) changes will come to Irish employment law b) the recipe for how to deal with these changes has yet to be delivered.

Author: Rob Michael

Contact: [email protected]