Deliveroo decision highlights muddle that is employment status in the UK

The Association of Independent Professionals and the Self-Employed (IPSE) said “it must not continue to be the case where the only way to show someone’s self-employed status in the UK is through the courts”.

IPSE policy director Andy Chamberlain commented: “We urge government to step in and clear the confusion in the gig economy, which arises from the fact that while UK law clearly defines worker and employee status, there is still no definition of what it is to be self-employed. We believe the only way to resolve this is to write a statutory definition of self-employment into UK law – not only to secure the rights of people who should properly be classed as workers, but also to protect the freedom of legitimately self-employed people.”

Seb Maley, CEO of IR35 consultancy firm Qdos, agreed it was a “big blow to Deliveroo riders and many other gig economy workers who feel they deserve employment rights” and that the Court of Appeal’s decision, which was handed down on 24 June 2021, “also shows that the recent Uber ruling may not have set a precedent after all”.

“The case exposes the confusing nature of employment law, which leaves millions of people in no man’s land, unsure of whether they’re self-employed, a worker or employed,” Mr Maley said. “[It] also proves that making well-informed employment status decisions that all parties agree to from day one is vital. Misunderstandings and mistakes pose a big threat to businesses, who could face legal problems and even tax liabilities further down the line.”

Mr Maley explained Deliveroo couriers could “provide a substitute, which was key in them being seen as self-employed”, which meant they “didn’t deliver their services personally, as an employee does”. “But that’s not to say just having the right to sub in someone else shows a person is self-employed,” he added. “A host of factors must be considered before employment status is set.”

In the Court of Appeal ruling, the judges dismissed the appeal by the Independent Workers Union of Great Britain (IWGB), a trade union, for a group of Deliveroo couriers (known as “riders”) to unionise – for which they would have to be recognised as “workers” as defined by the Trade Union and Labour Relations (Consolidation) Act 1992. The IWGB had been unsuccessful in prior applications to be recognised by Deliveroo, and had previously appealed lower court findings that Deliveroo riders are not workers, but self-employed.

The Court of Appeal agreed with previous rulings. While the Supreme Court decision in Uber was acknowledged, the judgment stated the Uber reasoning “does not advance the arguments in this case” as “Uber did not rely on any substitution clause”, unlike Deliveroo, where riders could use substitutes or subcontractors to carry out any Deliveroo jobs they took on. The court also found that riders also had the right to choose which tasks to accept, and the right to work for a competitor.

The Court of Appeal ruling was welcomed by Deliveroo, who said in a statement: “UK courts have now tested and upheld the self-employed status of Deliveroo riders four times. Our message to riders is clear. We will continue to back your right to work the way you want. Deliveroo’s model offers the genuine flexibility that is only compatible with self-employment, providing riders with the work they tell us they value.”

However, the IWGB is reportedly considering appealing the decision in the Supreme Court. “Deliveroo couriers have been working on the front line of the pandemic and whilst being applauded by the public and even declared heroes by their employer, they have been working under increasingly unfair and unsafe working conditions,” IWGB president Alex Marshall stated. “The reward they have received for their herculean effort? Deliveroo continuing to invest thousands of pounds in litigation to silence workers’ voices and deny them the opportunity to negotiate better terms and conditions.”