UK Deliveroo ruling: with great flexibility comes… no collective bargaining rights

Gig economy operators have always set themselves apart with their flexible approach to the way they do business. And this applies not only to their customers, but also to the drivers, riders and other individuals who, in a way, make it all possible. 

Now, if that great deal of latitude in the relationship is genuine, as the Deliveroo self-employed engagement model proved to be in the recent UK Supreme Court decision, then gig workers may well be neither employees, nor workers, essentially precluding them from benefiting from the right to freedom of association.

Back to the drawing board for the industry?

The recent ruling delivered by the Supreme Court in Independent Workers Union of Great Britain v Central Arbitration Committee confirmed the status of Deliveroo riders as self-employed.  This case is a rare instance of a successfully constructed self-employed gig economy engagement model. And its effects might not be limited to the food delivery industry but could propagate to other sectors as well. 

Indeed, the decision could prompt other gig economy operators to use the contractual template refined by Deliveroo as a blueprint for their gig worker terms of engagement. This means that many other companies may take a closer look at the way they structure their contractual relationship with gig workers. 

However, having a contractual blueprint to follow is one thing; evidencing that it reflects the reality of the relationship might prove more difficult. 

The difference between form and substance

Deliveroo drivers enjoyed considerable flexibility not being obliged, for example, to accept a minimum percentage of orders or to work exclusively for one provider. Yet, the all-important feature of the relationship between Deliveroo and its riders was the substitution clause which gave riders a right to provide a substitute to perform their tasks. 

After careful analysis of the evidence presented by Deliveroo, the first instance court held that the substitution right was indeed genuine, which meant that the contractual terms were not a fictional construct but were, in form and substance, indicative of self-employment. 

Looking ahead 

Each case is unique and, as Coulson LJ pointed out in his Court of Appeal conclusion, “there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate”. 

Moreover, the (ab)use of the substitution clause in cases where the rationale for its existence is unclear, and evidence of its use in practice is flimsy might, in reality, prove costly in the event of litigation. Therefore, care should be taken when drafting contractual clauses that take inspiration from the Deliveroo blueprint. 

Read more in our Employment team’s recent insight: Supreme Court denies Deliveroo riders right to collective bargaining because they are not workers. See also: Better together? European Commission publishes final guidelines on how competition rules apply to gig economy workers.