In a landmark ruling for the gig-economy, the UK Supreme Court ruled that Deliveroo riders could not be recognized as employees and cannot be represented by unions to engage in collective bargaining.
The Independent Workers’ Union of Great Britain, which is the largest app-based couriers’ union in the UK and has tens of thousand Deliveroo members as its membership, fought this case for over seven years.
Five judges unanimously ruled on Tuesday that the contracts between riders, Deliveroo and the company do not constitute “employment relationships” since riders could use someone else to cover their deliveries.
It said that riders are free to refuse work offers, make themselves unavailable and work for competitors. The report said: “Once more, these features are fundamentally incompatible with any notion of employment.”
Deliveroosaid that the decision was “positive” for its riders. They added that “thousands of people apply every week to work for Deliveroo, because they want to have the freedom to choose when, where, and whether or not to work”.
It said: “We’re proud to be in a position to offer this flexibility to tens and thousands of riders, along with the security of insurance coverage, new parent support, and an unique union recognition agreement.”
In 2017, the Central Arbitration Committee dismissed the case, finding that the riders were not employees because they could replace someone to finish their order.
In April, the IWGB appealed the case through the courts to the Supreme Court.
IWGB called the decision a “disappointment”. “We can’t accept that thousands riders are working without the protection they need. . . We will continue to use all the avenues at our disposal to present this case,” it stated.
Yvonne Gallagher of Harbottle & Lewis said that the ruling was “a fundamentally important ruling for the gig economy and not just Deliveroo”.
She added that “the Supreme Court’s ruling could lead to other gig-economy companies adopting the Deliveroo approach to employment, where it suits their business model.”
Deliveroo is yet to generate a positive free cash flow. The London-based firm’s pre-tax losses decreased from £127.1mn during the first half last year to just £57.6mn for the first six-months of 2023. Revenues grew by 5% to £1bn.
In the first half of 2018, the company generated £418.4mn in revenues outside the UK and Ireland. This is as legislators in Brussels are discussing new rules that will give gig workers greater protection in EU member states.
According to proposals made by the European Council (the executive body of the EU), companies that restrict the hours workers can work, their attire at work, and whether or not they accept work must classify them as employees.
Deliveroo stopped operating in Spain nearly a year after the country amended its laws to grant gig economy workers certain rights, including collective bargaining.