When considering an application for union recognition in Independent Workers’ Union of Great Britain v RooFoods Limited T/A Deliveroo, the Central Arbitration Committee (CAC) held that, as the drivers had a genuine right to substitute which operated in practice, they could not be workers under section 296 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
In November 2016, the union submitted a formal request for recognition to Deliveroo on behalf of a group of 100 workers, about a third of whom were union members. As the company managed its business by dividing workers into different geographical zones, the union picked a bargaining unit based on the zone of Camden and Kentish Town in London.
The company rejected the application on the grounds that the drivers were not engaged as workers under section 296 TULRCA but rather as “suppliers”; the union did not represent the views of the drivers nationally; and the proposed bargaining unit was inappropriate and not compatible with effective management.
The union submitted an application for statutory recognition under schedule A1 of TULRCA to the CAC.
Recruitment and substitution
As part of the recruitment process, Deliveroo requires drivers to fill in an application form, undergo a telephone interview, attend a trial session during which they are assessed for, among other things, their bike riding competency. If they are successful, they then have to undergo an online training course. Once accepted they have to sign a “supplier agreement”.
Shortly before the hearing, Deliveroo issued a new agreement which contained two major changes. Firstly drivers were no longer required to wear uniforms; and secondly it contained a substitution clause stating that drivers were entitled to appoint someone else to work on their behalf at any time without the company’s prior approval.
Schedule A1 of TULRCA states that unions can only seek recognition on behalf of a group or groups of “workers”.
Section 296 of TULRCA states that a worker is an individual who works under a contract of employment or “under any other contract whereby he [sic] undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his”.
Section 230(3) of the Employment Rights Act 1996 states that a worker is an individual who works under a contract of employment or “any other contract … whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.
The CAC rejected the union’s application for recognition on the ground that the substitution right was genuine and that it operated in practice.
This finding was fatal to the union’s claim because it was not possible to say that the drivers undertook “to do personally any work or services for another party” as required under section 296. Although Deliveroo required the delivery to be undertaken by a person, it did not have to be the driver hired by the company who personally performed it as they were free to substitute at will.
The CAC therefore concluded that “By allowing an almost unfettered right of substitution, Deliveroo loses visibility, and therefore assurance over who is delivering services in its name, thereby creating a reputational risk, and potentially a regulatory risk, but that is a matter for them. The Riders are not workers within the statutory definition of either s.296 TULR(C)A or s230(3)(b) Employment Rights Act 1996”.
The CAC was clearly sceptical about what it termed the “substitution conundrum” and asked the question “what would be the point of using a substitute if you were a Rider, and why would you let a Rider do it if you were Deliveroo?’” However, on the facts of this particular case, the CAC accepted that the substitution right was genuine and that there was evidence of it being operated in practice.