The on-going debate on whether so-called gig workers are entitled to employment rights has swung back in favour of the employer, following a High Court ruling handed down this week (December 5).
Mr Justice Supperstone said take-away delivery riders working for Deliveroo, represented by the Independent Workers Union of Great Britain (IWGB), could not be classed as members of staff as they were able to turn down work and pass jobs to other riders.
This means they have no automatic rights to holiday pay, the minimum wage and pensions contributions.
Although the court case, which was a judicial review brought by the union, was ostensibly about the riders’ rights to union representation, the judgment also covered the claimants' rights to be auto-enrolled into a pension scheme.
Acting for Deliveroo, Darren Isaacs, a partner at GQ Little, told the court: "The key reason this is different to other cases is that Deliveroo riders, in their contracts, they have a right of substitution, which actually is how it operates in practice.
"What it means is that, when a Deliveroo rider picks up a job, either they can do the job or they can substitute someone else to do the job. Whenever you have that right, provided that is how it works in practice, they are not able to say they are a worker within the meaning of the legislation."
The Deliveroo ruling is contrary to that of Pimlico Plumbers, which was handed down in the Supreme Court earlier this year. In this case the court upheld the employment status of plumbing and heating engineer Gary Smith, affirming that he was a worker rather than a contractor under employment law.
Pimlico Plumbers had appealed an earlier ruling in favour of Mr Smith on the grounds that he was self employed and therefore not entitled to be enrolled into the company’s pension scheme.
In a separate case from 2016, an employment tribunal ruled that drivers for the app-based taxi service Uber were not self-employed. Uber appealed the decision in 2017 and lost.
Romi Savova, CEO of Pension Bee, said: "It is very disappointing that this ruling will deny Deliveroo rights to a workplace pension. However, Deliveroo could still help their drivers build up retirement savings.
"Auto-enrolment is not the ideal solution, as it does not cater for some non-typical, non-traditional jobs. In these cases, it would be good to see employers taking the lead and helping those who work for them but are not entitled to a pension to save for one in any case."