The Central Arbitration Committee (CAC) has decided that Deliveroo’s couriers, known as Roos, are self-employed and not workers. Whilst the case concerned an application for Trade Union recognition, to succeed the couriers had to show they were not self-employed.
Deliveroo delivers food from restaurants to customers using a fleet of cycle and motorcycle couriers. All couriers must first undertake an interview, training and a criminal records check before being engaged by Deliveroo. If they pass that assessment they are engaged on a self-employed contract and must pay a £150 deposit for equipment (the Deliveroo app for their phones and food delivery bag).
Deliveroo changes its business model
Not long before the CAC hearing, Deliveroo made some significant changes to how it engaged its fleet of couriers:
- couriers no longer needed to wear Deliveroo branded clothing whilst working for Deliveroo (and could even wear a competitor’s branded clothing);
- couriers could subcontract any delivery they accepted to anyone they wanted without the prior consent of Deliveroo. The substitute did not have to undertake any training or have a criminal records check; and
- couriers are no longer penalised if they are available for work but don’t accept a delivery so long as they accept at least one delivery every 3 months.
These changes were crucial to the CAC’s decision that the couriers were self-employed and not workers. Most critical to their decision was that couriers could now sub-contract the work to anyone without gaining Deliveroo’s prior approval. This lack of control over who was carrying deliveries under the Deliveroo brand potentially puts Deliveroo at risk of brand and reputational damage. Whilst the CAC felt it made little business sense for Deliveroo to allow this, it was satisfied that on rare occasions it did happen and was not a sham. As there was no requirement for the couriers to personally do the work, they could not be workers and were self-employed.
Comparison to Uber
Only last week the Employment Appeal Tribunal upheld a decision that Uber’s drivers were workers rather than self-employed. The difference was the amount of control Uber exerted over how, where and when the drivers work.
Deliveroo seems to have sought to avoid a decision that its couriers are workers by modifying the terms of its engagement with them. By doing so, it appears Deliveroo is prepared to accept the attendant risk of reputation and brand damage. It will be interesting to see if other 'gig economy' companies take the same approach.
All eyes are now on whether the Government implements Matthew Taylor’s recommendation in his Review: Good Work to revisit the definition of 'worker' and replace it with 'dependent contractor'. With the Taylor Review’s dependent contractor distinction placing a greater emphasis on control rather than on the right to provide a substitute, would Deliveroo’s new model stand up to that test or would further change be needed?