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13 December 2017
The Central Arbitration Committee (CAC) has rejected an application from the Independent Workers' Union of Great Britain (IWGB) for collective bargaining rights in respect of Deliveroo riders.
The key problem for the IWGB was the fact that Deliveroo's riders have the right to use a substitute to perform deliveries both before and after they have accepted a job. The CAC held that this is a genuine right which riders take advantage of in practice. This finding proved fatal to the IWGB's application as it is inherently incompatible with the obligation to work personally, which is required for both worker and employee status.
The employment status of an individual determines his or her legal rights in the workplace. Under UK law, there are three different capacities in which someone can provide work:
Employees have more rights than workers, who in turn have more rights than self-employed contractors. For example, workers are entitled to:
In addition, employees qualify for, among other things:
Self-employed contractors enjoy none of these rights. They are regarded as having greater power and autonomy than workers and employees, and as being less in need of protection.
However, the label that the parties give to their relationship in the written contract is not conclusive and the individual's working status is not always obvious. In an employment relationship, there is a 'mutuality of obligation' (ie, on the one hand, an obligation to turn up to work and on the other hand, an obligation to provide and pay for work). There is also an obligation of 'personal service' (ie, employees cannot send a substitute to do their job instead). In addition, the individual must be sufficiently under the employer's control. These are the three key factors indicating employee status. However, a host of other factors (eg, who takes the financial risk, who provides the equipment, how pay is determined and how integrated the individual is into the organisation) may point one way or another.
All employees are workers; however, not all workers are employees. While statutory definitions vary slightly, a worker who is not an employee is generally someone working under a contract which is not an employment contract, through which they undertake to perform work personally for a party which is not – by virtue of the contract – a client or customer. In other words, workers agree to work personally and are not running their own business.
Case law developments are continuing to unfold against a fascinating and novel backdrop. Facilitated by new technology (eg, mobile apps and smartphones), many people now work in the so-called 'gig' economy, in which individuals are paid for specific jobs or assignments, rather than under an ongoing relationship.
The decision in IWGB and Roofoods Ltd t/a Deliveroo was unusually issued by the CAC, a specialist body on trade union matters, rather than the Employment Tribunal. The CAC had to decide whether Deliveroo riders are workers under the Trade Union and Labour Relations (Consolidation) Act 1992, which was necessary for the IWGB to have standing to pursue its recognition claim.
The CAC heard extensive evidence on the flexibility enjoyed by Deliveroo's riders, including their ability to accept jobs from different companies at the same time as making themselves available to Deliveroo and the fact that they are not required to wear branded kit while performing a delivery. Nonetheless, the CAC decided that it was unnecessary to dissect the wider features of the contractual relationship between Deliveroo and its riders because the right of substitution alone meant that the riders are neither workers nor employees.
The CAC carefully examined the right of substitution and the IWGB's argument that it was not genuine and could not be exercised in practice. Rejecting these assertions, the CAC ruled as follows:
The CAC concluded that "it cannot be said that the Riders undertake to do personally any work or services for another party". Therefore, the IWGB's recognition application failed.
The CAC's decision is fact-specific. The factual circumstances differ, for example, from those in the Employment Appeal Tribunal judgment which held that Uber drivers' access to the Uber app was personal and there was "no question of any driver being replaced by a substitute". It therefore raises questions as to whether other companies might update their engagement models if they wish to procure services from self-employed individuals only.
The decision also raises more general issues of public policy which were highlighted in July by the Taylor report (for further details please see "The future of employment law: Taylor-ed to fit?"). It remains to be seen what specific proposals for reform of employment law may emerge from this case.
For further information on this topic please contact Colin Leckey or David Hopper at Lewis Silkin by telephone (+44 20 7074 8000) or email (email@example.com or firstname.lastname@example.org). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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