UK Supreme Court Clarifies What Constitutes an Employment Relationship

On 21 November 2023, following seven years of litigation between the Independent Workers Union of Great Britain (IWGB) and Deliveroo, the Supreme Court handed down its judgement in the case of Independent Workers Union of Great Britain v Central Arbitration Committee and another, finding that riders for Deliveroo do not hold the legal status of employees and as such did not fall within the scope of Article 11 of the European Convention of Human Rights which would have conferred rights on the riders to join and be represented by a trade union.

In 2017, the Central Arbitration Committee rejected an application by IWGB for union recognition on the basis that the Deliveroo riders did not meet the definition of “workers” under the Trade Union and Labour Relations (Consolidation) Act 1992. IWGB challenged this finding. Following seven years of litigation, the Supreme Court has now upheld that the Deliveroo riders were not in an employment relationship. As such, IWGB’s appeal to request that Deliveroo recognize the union for collective bargaining on behalf of riders has been rejected.

In determining the status of the Deliveroo riders, the Supreme Court found the following factors were “fundamentally inconsistent with any notion of an employment relationship”:

  • The riders’ contracts with Deliveroo gave riders “a broad and unfettered right” to use a substitute and “there was no policing by Deliveroo of a Rider’s use of a substitute and Riders would not be criticised or sanctioned for using a substitute”;
  • Deliveroo “did not object to the practice of substitution by a Rider for profit”; 
  • Riders were not required to complete work personally;
  • Riders were not required to be available at any particular time and could work if and when they chose;
  • Riders were free to choose their place of work;
  • Riders were responsible for the costs of their equipment;
  • Riders were free to reject offers of work;
  • Riders did not have an entitlement to annual holidays; and
  • Deliveroo did not object to riders working for their competitors.

The “unfettered” right of substitution and lack of requirement for personal service have been key considerations in status determination. In their findings, the Supreme Court confirmed that the “broad power of substitution” was “totally inconsistent with the existence of an obligation to provide personal service which is essential to the existence of an employment relationship”. This confirmation, together with the consideration placed on the factors set out above, provides helpful guidance on what factors will be considered in both status determination and establishing an employment relationship.

The issue of status and defining groups of employees and workers has been a challenge for many employers, particularly those organisations operating gig economy models. This judgment provides welcome affirmation for those organisations seeking to utilise flexible working models within the UK.

While the Supreme Court proceeded on the basis that the riders were not workers, the judgment does provide further clarity in determining worker status.

The issue to be determined by the Court was whether the Deliveroo riders were in an employment relationship with Deliveroo. The Supreme Court confirms that, when considering the obligation of personal performance of a contract, a genuine right of substitution will be the key factor in determining employment status.

Whilst this is a helpful judgement for both status determination and trade union recognition, it is worth noting that there may be further challenges ahead for employers if a successful Labour government actions its proposals to provide more protections to the self-employed.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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