Gig economy giant Deliveroo’s stance on the status of its riders was upheld in the Supreme Court last week. Although not an IR35 case appeal, the Court’s judgement sheds additional light on some important principles in determining employment status.
Deliveroo riders not recognised as workers
The background to the case stemmed from Deliveroo’s refusal in 2016 to enter into collective bargaining negotiations with the Independent Workers of Great Britain trade union.
The union subsequently applied to the Central Arbitration Committee (CAC), a body which has the powers to order an employer to recognise a union if certain conditions set out in the Trade Unions Act 1992 are met.
The CAC found that Deliveroo riders did not fall under the definition of ‘workers’ in that Act and also rejected claims that a refusal to recognise them would breach Article 11 of the European Convention on Human Rights.
A request for a judicial review was rejected in 2018 and upheld in the Court of Appeal leading to a Supreme Court hearing in April 2023.
The right of substitution was exercised
The Supreme Court made it clear that for the union’s case to be successful it needed to show that the Deliveroo riders were in an employment relationship as a pre-condition to obtaining trade union rights.
Evidence was heard on the contracts which governed the working relationship between Deliveroo and its’ riders and how the relationship manifested itself in reality.
The Court looked very closely at the evidence gathered by the CAC on the issue of ‘personal service’ and how the right of substitution, contained in both the contract and in practice was exercised.
It referred to existing, well-known employment status cases like Autoclenz and Pimlico Plumbers Ltd and the more recent Uber case reasoning around substitution. It agreed with the determination reached by the CAC that the existence of an unfettered, genuine right of substitution at will, both contractually and in substance negated an employment relationship.
As a stand-alone case this Supreme Court brings us nothing new in terms of IR35 but does serve to reinforce the test of substitution, both contractually and in the reality of the working practices.
Mutuality of obligation wasn’t considered
Because of the weight given to the right of substitution in this case, the Court agreed with the CAC that the other aspects commonly influencing employment status, such as financial risk, provision of equipment, availability for other work etc all carried far less influence. Furthermore, the issue of mutuality of obligation was not even considered in this case, such was the strength of the right of substitution.
