Riders at Deliveroo are employees

On 24 March, the Supreme Court issued an important ruling in the field of labour law. The question that had to be answered was whether Deliveroo's riders were working on the basis of an employment agreement or a service agreement. The Supreme Court upheld the judgment of the Amsterdam Court of Appeal that Deliveroo riders are employees and not self-employed persons. According to the Supreme Court, the court of appeal correctly determined that the relevant criteria (the performance of work, pay and the relationship of authority) were met.

The case
Deliveroo riders were working under agreements described as service agreements. Trade union FNV felt that this was incorrect and that in reality the Deliveroo riders were working on the basis of employment agreements. FNV therefore filed a collective action against Deliveroo stating that the riders were working on the basis of an employment agreement. The subdistrict court and the court of appeal ruled that indeed employment agreements existed. Deliveroo appealed against the court's judgment to the Supreme Court. During the cassation proceedings, Deliveroo terminated its operations in the Netherlands. This has no consequences for the handling of the case, as Deliveroo did not withdraw its appeal in cassation.

Cassation
Deliveroo asked the Supreme Court to overturn the court's ruling. Deliveroo argued, among other things, that the riders were allowed to have someone replace them (i.e. perform their duties in their stead)  and had the freedom to either work or not. According to Deliveroo, this does not fit with an employment contract.

Supreme Court ruling
The Supreme Court upheld the court of appeal's opinion that Deliveroo's riders were working on the basis of an employment agreement. According to the Supreme Court, the existence of an employment contract depends on all circumstances of the case. The court of appeal assessed those circumstances and subsequently ruled that the Deliveroo riders were working on the basis of an employment agreement. Regarding the freedom of the riders to work whenever they wanted and to be replaced, the Supreme Court considered that the court of appeal recognised that these circumstances pointed in the direction that no employment agreement existed between Deliveroo and the riders. However, the court was entitled to rule that nevertheless employment agreements existed based on the other circumstances of the case. In doing so, it considered that the practical importance of the replacement option for the riders was minor. According to the Supreme Court, the question whether there is cause for further general rules or starting points to determine whether an agreement is an employment agreement, partly to distinguish self-employment, is a matter for the legislator. This could include principles such as the degree to which the work performed is embedded into  the organisation of the person for whom the work is performed, or the amount of the consideration for the work. As the legislator is currently actively reviewing this issue, the Supreme Court sees no reason to take an active role in legal development at the moment. Thus, with the Supreme Court's ruling, the court's judgement remains in place.

In the case of Deliveroo, some clarity has now been created. This is not necessarily the case for other companies that work with contractors (self-employed persons), because all circumstances of the case must be considered for each situation, the 'holistic' approach. If an employment agreements exists instead of a service agreement, the person performing the work is entitled to, among other things, protection against dismissal, salary during illness, holidays and (possibly) severance pay. If you have any questions about this, please feel free to contact us.