30 Mar Platform labour under fire
Deliveroo provides a meal delivery service from restaurants to customers. Until 2018, the delivery drivers were employed at Deliveroo under fixed-term employment contracts. As of February 2018, Deliveroo decided not to renew the employment contracts and the delivery drivers have worked as self-employed persons ever since. To receive orders, the delivery drivers must install an app on their phones. They work on a contract basis. Deliveroo distinguishes two types of contracts. Most delivery drivers work on the basis of a Regular contract, which allows the delivery driver to earn a maximum of 40% of the regular minimum wage per four-week period, meaning that they need not be VAT-registered. If a delivery driver is about to exceed that limit, Deliveroo temporarily excludes him or her from new assignments. A delivery driver can earn more under the Unlimited contract, but must then be VAT-registered.
The court previously also ruled that Deliveroo’s delivery drivers work on the basis of an employment contract. Deliveroo appealed that judgment.
Court of Appeal’s judgment
Regarding the classification as an employment agreement, the Court of Appeal referred to the Supreme Court’s X/Municipality of Amsterdam judgment of 6 November 2020. According to the Supreme Court, the elements “in employment”, “wage”, “during a certain period of time” and “labour” must be considered. That classification must be made on the basis of the rights and obligations agreed on between the parties. What those rights and obligations are must be determined on the basis of the parties’ intention. In the present case the Court of Appeal assessed the various elements as follows.
It is undisputed that the delivery drivers perform labour. The parties disagree as to whether or not the delivery drivers are free to accept an assignment. Also, the delivery drivers can be replaced and, because of the app’s login system, have a greater degree of freedom to decide for themselves whether they want to work. That freedom may suggest the absence of an employment contract, but in the Court of Appeal’s opinion it is not of such a nature as to be incompatible with the classification of “employment contract”.
Deliveroo pays its delivery drivers a fixed amount per order for the work performed, which satisfies the wage requirement. The individual delivery drivers cannot influence the amount of the wage. According to the Court of Appeal, that is more in line with an employment contract than with a contract for services.
In the employment of
In the Court of Appeal’s opinion, the work performed by the delivery drivers may be considered Deliveroo’s core activity; that may point towards a relationship of authority relationship. The fact that Deliveroo each time unilaterally changes the provisions of the contracts and the manner in which the work is organised also suggests that Deliveroo exercises authority over the delivery drivers.
The fact that the delivery drivers are free to choose their own route carries little weight. Deliveroo’s tracking system allows thorough monitoring, which suggests a form of authority. It furthermore gives Deliveroo a great deal of influence over the manner in which the work is performed. The payment model unilaterally adopted by Deliveroo also points towards authority.
The Court of Appeal therefore found that the manner in which Deliveroo has its delivery drivers perform work is indicative of the existence of a relationship of authority.
During a certain period of time
The Court of Appeal ruled that it had not been demonstrated that the delivery drivers who work for Deliveroo do so to a negligible extent. According to the information provided by Deliveroo, the delivery drivers work on average more than twenty hours per month. In the Court of Appeal’s opinion, the standard set in Article 7:610 of the Dutch Civil Code that the work must be performed during a certain period of time has therefore been met.
The Court of Appeal found that the freedom given to the delivery drivers to determine when they want to work is in actual fact the only circumstance that suggests the absence of an employment contract. But that freedom can also exist in an employment contract. All the other elements, including the manner of payment of wages, the authority exercised, the certain period of time and other circumstances, sooner point to the existence of an employment contract. The Court of Appeal therefore upheld the court’s ruling.
Deliveroo has announced that it will file an appeal with the Supreme Court. The Supreme Court’s ruling will have to be awaited. After Uber had already been labelled an employer by the highest courts in France and England, the next company that uses platform labour now runs the risk of being classified as an employer. It remains to be seen to what extent that will have further consequences for other platform companies; the Supreme Court may soon provide more generally applicable guidance in this respect.
For more information or advice on this subject please contact Bart de Vroe (+31-6-20366243).
This article was published in the Newsletter Vestius of March 2021