The Deliveroo Dispute
by Amy Cousineau Massey, 10 April 2017
Fast food delivery service Deliveroo are facing a mutiny from some of their couriers. The riders are claiming that they are employees, and so entitled to the rights associated, Deliveroo however, say that they are self-employed contractors which means they’re not. So, who is right?
The action comes after cycle courier company City Sprint and drivers for Uber have both raised claims to fight for the enhanced rights they believe they should be receiving from the companies they work for.
It seems strange that Deliveroo should be referring to their couriers as self-employed contractors, as they have to buy and wear their distinctive uniforms, are paid a set rate and the activity during their shifts is closely monitored by Deliveroo which suggests that it’s a dependent working relationship.
What’s the difference between a self-employed contractor and an employee?
Employees are entitled to 28 days paid annual leave, rest periods throughout the day, working a maximum average of 48 hours each week and protection against unfair dismissal after two years of service – self-employed contractors aren’t entitled to any of this.
In addition, Deliveroo drivers don’t receive any holiday pay, sick pay, maternity pay and are being paid wages below the minimum wage, which is why the riders are challenging their employment status. They want to be able to receive these enhanced benefits and be treated fairly.
Self-employed contractors are responsible for their organising their own taxes, receive none of the financial benefits of being an employee and are not entitled to receive a working pension – essentially they are on their own.
Who makes the decision?
When a claim of this nature is raised, it goes to the HMRC and/or the Employment Tribunal who look at the evidence presented to them and will then make an informed decision. Both HMRC and the Employment Tribunals will not only take into account the contract, but will also look behind this at the whole picture. They analyse the situation from a human point of view to decide whether they believe the workers are entitled to more.
If the employment tribunal finds in favour of the workers who raised the initial claim, this would have major financial implications for the company. They could not only face fines for incorrect National Insurance payments, but also have to cover backdated pay and holiday allowance – if there’s a relatively high number of claimants, like the 20 in the Deliveroo case, then this could work out to be very expensive, especially for SMEs.
These two bodies don’t have to agree on their decision, which creates another level of uncertainty for both the company and claimants.
When examining the ‘big picture’, both HMRC and the Employment Tribunals will look at things such as:
The level of control the company has over the worker or employee – a higher level means that they are more likely to be an employee
Self-employed contractors do not usually wear uniforms
Their integration in the company – for example is their number listed in the employee directory
Whether the individual is working exclusively for one company
Amongst many other factors used to determine whether the individual is a contractor or employee and this is not limited to just the points above.
What to do if you’re in the same position?
If you’re concerned about the employment status of some of your workers then get in touch and seek legal advice.
As time moves forward, this issue will become more and more prevalent, especially when high-profile cases such as Deliveroo and Uber become increasingly common. Remember; even though the contract may say one thing, the decision-makers take the whole situation into account, rather than what’s simply written on paper.
Contact our employment law solicitors