Arbitration Committee delivers new blow to Deliveroo riders

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Arbitration Committee delivers new blow to Deliveroo riders

November 22nd, 2017, Blog

Contrary to recent tribunal decisions, the Central Arbitration Committee (CAC) has determined that Deliveroo riders are self-employed and not workers.  The application for union recognition was therefore unsuccessful.

Had the application succeeded, then the IWGB Union would have been entitled to conduct collective bargaining with Deliveroo on pay, hours and holidays on behalf of the Deliveroo riders in the relevant bargaining unit.  This would have been more effective and benefited a wider group of workers than recent tribunal decisions confirming worker status.  Such decisions only benefit those individuals who submit a claim.

The determining factor for the CAC was that the contracts between Deliveroo and the riders provided for a genuine right of substitution and Deliveroo producing evidence that this was used in practice.  It was irrelevant that Deliveroo changed their contracts shortly before the hearing and the reason for including this in the substitution clause was (most likely) to defeat arguments as to workers status.

Despite this set-back, it seems that worker status may finally be protected by a draft bill recently introduced by two parliamentary committees.  This provides that there should be a new “worker by default status” which will require companies to provide basic standards and benefits.  If worker status is disputed, the onus would fall on companies to prove self-employment status rather than forcing workers to submit applications to the courts and tribunals.  The committees recommend that test for worker status should “emphasise the importance of control and supervision of workers by a company”.

The draft bill is based on recommendations from the Taylor Report which criticised use of contracts to determine employment status and recommended protection for workers (being re-named dependant contractors) whilst maintaining flexibility for companies.

If the bill is implemented and worker status is confirmed, Deliveroo riders together with other gig economy workers would be entitled to the national minimum/living wage, holiday and sick pay.

Given that the business models for gig economy companies is based on self-employed status, prices would undoubtedly increase and workers may find themselves paying more tax!

The judge in the Uber case ruled that drivers accepting assignments were working for the company. However, five days later Deliveroo won a legal battle that confirmed the self-employment status of its workers, meaning it does not have to give its drivers minimum wage or holiday pay.

The legal win came after Deliveroo introduced a new contract that allowed drivers to swap routes with a friend that the company said would ensure more flexibility.

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