Deliveroo riders: employees or independent contractors?

For quite some time, there was uncertainty about the legal status of gig economy 'workers'. Until recently, no Dutch court had expressed its opinion on this issue. However, two significant decisions have been handed down recently by the subdistrict court of Amsterdam on the legal status of Deliveroo riders, with wider implications for platform 'workers':

• On 23 July 2018 the subdistrict court of Amsterdam ruled that a Deliveroo rider is a contractor.
• On 15 January 2019, the same subdistrict court ruled more generally, that Deliveroo riders perform their work based on an employment agreement. In a second judgment on the same day, the court also ruled that these riders fall within the scope of the industry-wide (haulage-sector) collective labour agreement (CLA). These last two proceedings were initiated by the Dutch Trade Union Confederation (FNV).

Below, we explore these cases in further detail.

Background facts

The online platform Deliveroo, which connects customers to independent restaurants via an order and payment system, initially employed their riders on fixed term employment contracts. However, at the end of 2017, Deliveroo changed their system and classed their workers as independent riders (contractors). Furthermore, in February 2018, Deliveroo decided not to extend any existing fixed term employment agreements with the riders. From that point on, the engaged contractors performed their work on the basis of a so-called “partner agreement”. FNV lodged an objection against the new system, and started legal proceedings, stating that the relationship between Deliveroo and its riders should still be qualified as an employment agreement.

The judgments

In the judgment of 23 July 2018, the subdistrict court in Amsterdam ruled that the relationship between Deliveroo and one of its riders should be qualified as a contract for services based on the written agreement of the parties.

However, in the judgment of 15 January 2019, the subdistrict court took the text of the agreement into consideration, but paid much more attention to the way the parties actually carried out the agreement. (This is also a common approach in the UK). In considering this claim, the subdistrict court agreed that the relationship between Deliveroo and its riders has not changed materially since the beginning of 2018. Relevant circumstances included:

• The fact that the partner agreement is a standard agreement, unilaterally compiled by Deliveroo, and non-negotiable.
• The freedom of the riders is limited, based on the schedule systems.
• Theoretically, riders can reject assignments, but doing so is detrimental for receiving new assignments and being able to accrue bonus payments.
• There is no real possibility to negotiate rates.
• If a rider arranges a replacement, this must be approved by Deliveroo.
• The work to be performed forms part of the main business of Deliveroo.
• The riders previously worked on the basis of an employment agreement.

Of course, as is true across Europe, the question of whether the relationship should be qualified as an employment agreement or as a contract for services is also of a general social interest (given the knock-on implications for payment of social security costs).

As mentioned above, the subdistrict court, ruled that the riders fall within the scope of the industry-wide CLA. As a result, Deliveroo is obliged to apply the terms of this CLA retrospectively. All in all, far-reaching consequences for Deliveroo.

Deliveroo has indicated that it will appeal against the ruling of the subdistrict court.

Read our article on the status of Uber drivers and Deliveroo riders in the UK