Right to substitute means Deliveroo riders are self-employed, says CAC

Peninsula Team

December 12 2017

In a decision that goes against the current trend, riders working for Deliveroo have been found to be ‘self-employed’. This decision shows the importance of having clear substitution clauses that reflect what occurs in practice.

In IWGB v Roofoods Ltd t/a Deliveroo, the union brought an application in the Central Arbitration Committee (CAC) to be recognised for collective bargaining. They first had to prove that the Deliveroo riders were workers, and not self-employed contractors.

The CAC heard evidence from witnesses and scrutinised the contractual documentation in place, most notably the Deliveroo contracts. Under these contracts, riders were not placed under an obligation to log on to the Deliveroo app, once logged on they could allocate themselves as “unavailable” for jobs, and they could ignore or reject any jobs without penalty.

There were also substitution clauses in the contracts, entitling riders to arrange for another person to perform their work before, or even after, accepting specific jobs. They needed no prior approval to do this and would simply give the substitute their app password or provide them with their mobile device. There was no policing of the substitution by Deliveroo and it was the responsibility of the rider to ensure the substitute had sufficient skills to perform their work.

Although the CAC found substitution in practice was rare, there was evidence that riders would substitute themselves in reality. There was evidence that a rider used substitution for his own financial gain and others would substitute themselves if they decided they did not want to perform a job once they had accepted it.

As the substitution right was genuine, unfettered and operated in practice, the riders were not obliged to perform work personally. They were, therefore, unable to be classed as workers and the riders were successfully found to be self-employed.

What this means for employers:

  • The contractual documents given to individuals are significant as they set out the relationship between the parties. This decisions shows the importance of having a well-drafted substitution clause in self-employed contracts which provides a genuine and unfettered right to substitute.
  • Recent ‘gig economy’ cases, including the Uber case, have shown that the tribunal can look behind the contractual documentation to assess how the relationship is carried out in practice. Therefore, if there is a right to substitute, individuals should be able to carry this out in reality. Limiting the right to substitute, or placing extra conditions on this right, could point towards worker status.
  • Deliveroo introduced new contracts in May 2017 and these removed aspects of control, including removing the requirement to wear Deliveroo branded equipment. The Uber case has shown that operating a significant degree of control over individuals will support an argument that an individual is a worker, and not self-employed.
  • This case is not binding on an employment tribunal, however, a tribunal will look at similar arguments and the same documentation so it is likely to be highly persuasive.

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