“(Substitute) me for him;

(Substitute) my coke for gin;

(Substitute) you for my mum;

At least I’ll get my washing done.”

Her Honour Judge Mary Stacey may, or may not, have been humming the famous Who song, Substitute to herself as she wrote the Judgment for the Central Arbitration Committee (CAC) for the recently released Deliveroo decision. In that case, which has received widespread publicity, Deliveroo’s riders, (known as “Roos”, which I suppose is an improvement on “Roomen” and Roowomen”), failed in an application for union recognition, the CAC holding that they were not workers but rather self-employed contractors.

So Deliveroo succeeded where before them, Pimlico Plumbers, Addison Lee and Uber had all failed. Why?

Why does worker status matter?

Establishing worker status gives the worker protection from unlawful deductions from wages, entitlement to receive the national minimum wage (NMW), and an entitlement to holiday and sick pay.

To claim worker status, the worker has to show either (a) they are employed under a contract of employment, or (b) they are employed under any other contract where they undertake to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. This second definition of worker is usually referred to as the limb (b) worker test. A key word in the definition is “personally,” as in personally perform.

Uber and Deliveroo compared

On paper, there are many similarities between the two businesses:

  • Both operate a technology platform which enables customers to book a taxi or takeaway through an App and which similarly enable the driver, or rider, to accept the “gig” through an App on his/her mobile.
  • Both have a selective on-boarding process for their drivers.
  • The customer makes the booking with Uber or Deliveroo and pays that company which then pays their driver against an invoice.
  • Until he/she accepts the gig, the driver does not know the destination of the fare or delivery.
  • The driver will be given a route by Uber or Deliveroo on his/her driver’s App.

However, there are some subtle differences. Uber drivers are expected to accept a minimum of 80% of the gigs which are offered to them once they have signed on to the App. Roos, it seems, only have to accept one gig every three months. Uber drivers are expected to follow the route which they are given by Uber, or face financial risk; Roos are free to choose. For the Uber driver, access to the App is personal and he/she cannot share his/her account or driver ID with anyone else. Roos are permitted to share these details with a third party. This is crucial to Deliveroo’s substitution clause.

Before the EAT, Uber’s primary submission was that it was an agent for its drivers and therefore they could not be workers engaged by it as employer. The EAT dismissed that argument, ruling that the drivers had been integrated into Uber’s business and operated under Uber’s control. They were therefore workers with workers’ rights.

Given the similarities between the two operations, why did the same considerations not apply to Deliveroo?

Deliveroo decision

Deliveroo persuaded the CAC that the Roos were self-employed contractors and not workers, as the Roos had an unfettered ability to appoint substitutes. Therefore, this was not a contract of personal service. Although the substitution right was only occasionally used, it was still nevertheless used in practice and therefore was a genuine right. This was the case even though there was a sense that Deliveroo had deliberately created the right of substitution in order to defeat any claim by their riders that they were workers, and even though this carried the collateral risk that the standards and service levels might drop if substitutes were used. The right of substitution was held to be fatal to the union’s claim that Roos were workers and a trump card in the debate.

The Roos’ QC asked with some justification, why would a rider ever bother to engage a substitute and why would Deliveroo spend so much time, money and energy selecting and training Roos if riders were then allowed to “sub-contract the right to use the App willy-nilly” to anyone? However, the simple fact was that Roos were able to use substitutes and occasionally did so in practice. Therefore, this was a genuine right of substitution and not a sham.

What next?

Uber has indicated that it wants to appeal against its loss and leapfrog to the Supreme Court, which inevitably and ultimately will hear one of these cases. Parliament has been called upon to legislate in order to bring some certainty to the issue of employee status within the gig economy.

In the meantime, those companies who wish to deny their self-employed contractors worker status can increase their chances of doing so by incorporating a genuine substitution clause into their contracts of engagement.

And the Roos? Maybe they are humming another Who anthem, “Won’t Get Fooled Again.”

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.