Labour Court Of Appeal Rules That Deliveroo Riders Are Employees

In a judgment of 21 December 2023, the Labour Court of Appeal of Brussels has ruled that certain Deliveroo riders (previously active) should be considered workers in a subordinate relationship with Deliveroo as the employer. This judgment reverses the first instance judgement of 8 December 2021 of the Labour Tribunal of Brussels that had ruled in favour of Deliveroo.

The case dates back to a claim by the Labour "auditor" (the public prosecutor) regarding the wrongful qualification as independent workers of the Deliveroo riders. In the same case, the 28 riders and four trade unions had voluntarily intervened to bring a claim against Deliveroo. The case revolves mainly around two issues: first the question of whether Deliveroo can use the special tax system for the sharing economy and second whether the riders should be considered employees or self-employed.

1. Application of the beneficial tax system for the sharing economy

Deliveroo claims that the riders were working under the special system for the sharing economy. This is a tax system which allows citizens to provide certain services to other citizens through a digital platform with a beneficial rate for income taxes and an exemption from social security contributions. However, the application of this derogatory system is contingent upon strict conditions. Just like was the case in the first instance, the Labour Court of Appeal maintains that Deliveroo does not meet the conditions of the system:

• Deliveroo riders deliver goods, which is explicitly excluded from the scope.
• The services can be qualified as a professional activity while the system is meant for non-regular activities.
• The services are not only provided to customers/citizens but also to businesses.
• Deliveroo claims that it only acts as a platform to bring the rider and the customer together to close a contract between themselves, but the Labour Court of Appeal considers this to be artificial.

Deliveroo obtained a tax ruling on 8 June 2021 in which the tax authorities agreed with the application of the beneficial tax system. However, this ruling only applies to the future and is not binding for the Labour Court of Appeal. In 2018 and 2019 the tax authorities had warned Deliveroo that it was illegally applying the system. In any case, the Labour Court of Appeal concludes that Deliveroo cannot use the system and that the application of the system does not imply anything regarding the qualification of the labour relationship. The only legal tool based for determining the employment relationship is the Labour Relations Act of 2006.

2. Qualification of the Labour relationship of the riders

A. Rebuttable presumption for the transport sector

Regarding the second question (the legal qualification of the relationship between Deliveroo and its riders), the Court first had to rule whether the specific rebuttable presumption of an employment contract for the road transport and logistics sector (PC 140.03) laid down in a Royal Decree of 29 October 2013 can be used. If more than half of the 8 criteria are fulfilled, there is a rebuttable presumption that the riders are employees and not self-employed service providers. Deliveroo claimed that it is not a transport or logistics company and therefore does not fall under the competence of this sector. However, as had happened in the first instance, the Court found plenty of arguments to rule that Deliveroo's main service is the transport of goods (goods) for a third party. Deliveroo also tried to claim that the specific criteria for this sector are unconstitutional (violating the principle of equality), but the Court (as did the Tribunal) rejected the request for a preliminary question to the Constitutional court.

Based on the analysis of the actual work situation of the Deliveroo Riders, the following specific criteria are fulfilled:

1. No financial risk for the Deliveroo rider;
2. No responsibility or decision power concerning the financial means of the company;
3. No decision power concerning the purchase policy of the company;
4. No decision power concerning the pricing or the remuneration for delivered services;
5. No "obligation de résultat" (obligation of result), only an obligation of means;
6. Not appear as a separate company towards third persons;
7. No possibility to subcontract for riders using the system of the sharing economy.

However, riders who are working as 'fully self-employed' for Deliveroo (not under the sharing economy system) can subcontract their work.

The only criterion that is not fulfilled is the fact that they do not work in a building owned by Deliveroo and do not use a (motorised) vehicle that they do not own or lease themselves.

As at least 6 out of 8 criteria are fulfilled (and for most riders even 7 criteria), there exists a rebuttable presumption that the Deliveroo drivers are employees. This is the same outcome as in the first instance.

B. Reversal of the rebuttable presumption by the 4 general criteria

In the first instance ruling, the rebuttable presumption of an employment contract was rebutted based on the 4 general criteria of the Labour Relations Act of 2006. The Court also does this qualification test:

I. Will of the parties

The Court indicates that the riders have signed service agreements which clearly provide that they will work as independent self-employed persons without any subordination. However, these are standard contracts which are signed digitally through the platform, leaving no room for any negotiation. Deliveroo does not prove either that the employees have been informed of the consequences of their status as a self-employed worker. Therefore, the will of the parties cannot be based on the service agreement but should be based on the actual execution of the work, which is examined by looking at the other 3 general criteria. This contrasts with the judgement in the first instance where the tribunal accepted the service agreement as sufficient proof.

II. Freedom to organise the working time

In the first instance, the Labour Tribunal had ruled that the riders were free to organise their working time as they have the absolute freedom to choose when they want to work or not, emphasizing that there is no obligation to work or to be available for work. However, the Court does not agree and states that this argument is based on an misinterpretation of this criterion. The Court refers to the case law of the Supreme Court which clarifies that the ability to decide whether or not to accept a work offer does not influence the freedom to organise the working time. Instead, one has to look at the organisation of the working time once the work has been accepted, i.e. what happens when the rider has made himself available to work for the platform. The Court states that the riders do not have the freedom to organise their working time based on the following arguments:

• The algorithm assigns the deliveries, the riders have no free choice or means to influence this attribution.
• The rider cannot increase the number of deliveries.
• The rider can refuse a delivery, but not based on all the necessary information as they will only receive the information regarding the address of the partner establishment (the restaurant) and the delivery fee, not regarding the address of the customer.
• If the rider rejects a delivery, he needs to justify the reason for the refusal via the app.
• Until April 2020, there was a system of pre-reservation of shifts. Thanks to an algorithm, Deliveroo would grant priority booking for certain riders. Deliveroo claims that this had no impact as the shifts were usually not 100% booked and that the riders were not punished for insufficient availability. However, the Court states that Deliveroo fails to prove these claims.

III. Freedom to organise the work

Deliveroo claims that it provides no instructions to the riders regarding the execution of the work, except for occasional technical instruction and claims that the riders are free to choose the itinerary and delivery methods. However, the Court states that there is no freedom to organise the work based on the following arguments:

• Deliveroo lays down specific modalities regarding the deliveries in the conventions or through in-app communications (step-by-step guidance) which the rider has to follow and validate. Deliveroo prescribes what needs to be done if something goes wrong.
• The free choice of the itinerary is relative as the itinerary suggested by Deliveroo is used to determine the price of the delivery and a rider who opts for a different route can be questioned by the operational services.
• Deliveroo imposes security standards.
• Deliveroo imposes standard equipment (smartphone, vest, isothermal bag, telephone holder) which can be controlled by Deliveroo.
• Deliveroo fixes the price via the algorithm without any room for negotiation or validation.
• Deliveroo makes the calculations and invoices and on the basis of this pays the rider (inversed invoicing).
• Even if the self-employed riders (who do not use the sharing economy system) are contractually allowed to get themselves replaced by someone else, in practice there are clear restrictions to this possibility and furthermore, this also seems not to be a possibility in reality as the app does not make this feasible.

This analysis completely reverses the one of the Labour Tribunal which followed the arguments of Deliveroo.

IV. Hierarchical control

Finally, Deliveroo claims that it has no power to exert any hierarchical control over the riders. It only gives occasional technical and operational instructions, without any sanctions for the riders. The use of the GPS-tracking system is solely for "commercial, financial and sanitary" reasons and not for surveillance. While the labour tribunal had followed Deliveroo's arguments, the Court rejected them on the basis of the following findings:

• Deliveroo reserves itself the right to process the geolocalisation data for the evaluation of the services of the rider. Even if the system is used for "commercial, financial and sanitary" reasons, this does not take away the fact that Deliveroo can use it to permanently follow and control the rider and inquire the rider about reasons for delays and to ask why the rider took a different route. If the rider is no longer traceable, he can be questioned and after certain delays, riders can receive a warning.
• Deliveroo reserves itself the right to sanction a rider with an immediate end of the contract if there is a serious or substantial shortcoming. As these concepts are not defined by the contract, Deliveroo will be able to unilaterally impose the sanctions if it determines a shortcoming to be of this nature. The contract included the non-activation of the geolocalisation as a reason for an immediate end of the contract.
• It is proven that Deliveroo creates statistics regarding the individual performances of the riders. Deliveroo does not prove that these are not used for sanctioning the riders.
• In a general manner, the complete relationship is controlled via algorithms and the app in a completely unilateral manner by Deliveroo.

In light of the analysis above, the Court concluded that Deliveroo did not prove the absence of a subordinate relationship and therefore does not rebut the presumption of the transport sector. Therefore, the riders are requalified as employees.

Finally, Deliveroo tried (but failed) to escape condemnation for the wrongful qualification of the riders as independent by (i.a.) claiming that the rules regarding the qualification of the employment status of workers in the platform economy were not clear. However, Deliveroo refused to use the administrative procedure which exists to request an opinion regarding the employment status and did not cooperate with the administrative procedures which were started by its riders. Furthermore, it appealed against the decisions of the administrative commission when the result was not in its favour.

Deliveroo has announced that it will submit an appeal against this decision before the Supreme Court.

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