Deliveroo riders have been ruled self-employed in a test case which was brought by the Independent Workers Union of Great Britain (IWGB).
The IWGB said the ruling showed a majority of Deliveroo riders wanted workers’ rights and union recognition.
The labour law body the Central Arbitration Committee (CAC) which ruled on the action against the delivery company found they were self-employed because of their freedom to “substitute” – allowing other riders to take their place on a job.
The case follows a number of claims brought by workers in the “gig” economy demanding rights such as holiday pay, the minimum wage and pensions contributions.
Drivers at Uber won a victory a week ago when the company lost an appeal at the Employment Appeal Tribunal against an earlier decision to grant them workers’ rights.
IWGB brought the case after it had asked Deliveroo to recognise it as a union representing drivers in Camden and Kentish Town and to start collective bargaining over workers’ rights.
Deliveroo refused and the case was taken to the CAC.
The company said its turquoise-and-grey clad “Roomen” and “Roowomen” wanted to keep flexibility of being self-employed.
But the IWGB said the ruling showed that Deliveroo riders were not satisfied with their current terms and conditions and wanted worker rights, including holiday pay and the minimum wage.
IWGB General Secretary Dr Jason Moyer-Lee said: “It seems that after a series of defeats, finally a so-called gig economy company has found a way to game the system.”
“On the basis of a new contract introduced by Deliveroo’s army of lawyers just weeks before the tribunal hearing, the CAC decided that because a rider can have a mate do a delivery for them, Deliveroo’s low paid workers are not entitled to basic protections.”
Dan Warne, Managing Director for Deliveroo in the UK and Ireland said: “This is a victory for all riders who have continuously told us that flexibility is what they value most about working with Deliveroo.
“As we have consistently argued, our riders value the flexibility that self-employment provides. Riders enjoy being their own boss – having the freedom to choose when and where they work, and riding with other delivery companies at the same time.”
Deliveroo said it was pushing to have employment law to be changed so it could offer its self-employed riders injury pay and sick pay.
Speaking about the decision Chris McCullough, CEO and co-founder at Rotageek, said: “This victory by Deliveroo signals the gig economy is here to stay. Drivers might now be considered self-employed, but employers with business models like Deliveroo’s must still take steps to foster loyalty and positivity within their workforce. To attract and retain workers, there must not be a trade-off between job security and flexibility.
“The gig economy offers a vital avenue to employment for many workers. Many need the flexibility offered by this type of employment: whether it is to fit their job around childcare, looking after a family member or even things like practising a sport or pursuing a long-term dream as a side-project. But there are also those who opt to work in this way as they feel empowered to have a better work-life balance. This move towards creating a sustainable work-life balance for employees is important and it needs to be protected and encouraged. However, if employers value gig economy workers, they need to ensure they’re protected if they’re ill or simply want a holiday.
“There’s also a lot other businesses can learn from the rise of gig economy workers. There are lots of opportunities for companies to hold onto staff through creating an internal gig economy. This means offering lots of flexibility and giving workers ownership of their hours. Finding a solution here can increase staff engagement and reduce staff churn. With the right platform, the solution will work for customers as well as employees.”