Last week’s ruling in Independent Workers Union of Great Britain v Central Arbitration Committee came as a great surprise to many employment lawyers: the Supreme Court unanimously held that Deliveroo Riders are not in an ‘employment relationship’ for the purposes of basic trade union rights under Article 11 of the European Convention on Human Rights (ECHR). Following contractual changes implemented by Deliveroo shortly before an application for statutory union recognition by the IWGB in 2016, the Central Arbitration Committee (CAC) found that Riders were able to designate substitutes to undertake delivery work under an unfettered substitution clause. This finding negated their worker status. The only basis for challenging this on appeal was to argue that Article 11 provided for a broader approach to personal scope, so that ‘employment relationship’ was wider than ‘worker’ under domestic law. After years of appeals, last week the Supreme Court agreed with the lower courts that a wide substitution clause is also fatal to an ‘employment relationship’.
The fundamental issue for the Supreme Court was whether the Riders were in an ‘employment relationship’ as defined by the ILO Employment Relationship Recommendation, 2006 (No 198). This is necessary for trade union rights under Article 11. According to Lord Lloyd-Jones and Lady Rose, the wide and valid substitution clause negated the ‘employment relationship’: ‘Such a broad power of substitution is, on its face, totally inconsistent with the existence of an obligation to provide personal service which is essential to the existence of an employment relationship within article 11’ .
With respect, the reasoning of the CAC and the Supreme Court is flawed and is a misapplication of the ILO instrument. Having found that the substitution clause was valid, and conferred a broad contractual power to delegate work to substitutes, the CAC declined to examine any other features of the work arrangement. And in a surprising aside, the CAC also ‘appears to have accepted Deliveroo’s submission that the new terms were permissible even if they had been introduced by Deliveroo to defeat the claim and to prevent the Riders from being classified as workers’ .
The Preamble to the ILO Recommendation makes clear that it should be applied purposively: ‘employment or labour law seeks, among other things, to address what can be an unequal bargaining position between parties to an employment relationship’. To this end, policies on employment relationships must ensure effective protection for ‘the most vulnerable workers, young workers, older workers, workers in the informal economy, [and] migrant workers’. The context of food delivery work – highly casualised and often performed by precarious migrant workers – is at the core of these concerns.
The test of employment relationship must allow ‘a broad range of means for determining the existence of an employment relationship’. It is flatly inconsistent with this approach to treat any one factor as determinative, like personal work. Indeed, the Court of Appeal in the Foster Carers’ case did not treat the absence of a contract as determinative but considered a broad range of factors in applying the legal test under Article 11.
Furthermore, there ought to be ‘a legal presumption that an employment relationship exists where one or more relevant indicators is present’. The Supreme Court undertook a roving review of the employment situation of the Riders, focusing on the precarious and casual nature of their contracts, to justify its conclusion that they were not in an ‘employment relationship’ . Again, the Recommendation requires a court to consider whether there were any indicative factors favouring inclusion and giving rise to a presumption of status. Here, there were many such factors: the typical level of remuneration of Riders; the presentation of standard terms on a take-it-or-leave-it basis; and the inability of Riders to negotiate their own fees in any meaningful way. Finally, it is simply untrue to say that ‘an obligation’ to provide personal service is ‘essential’ to the legal test under the ILO Recommendation. The instrument highlights the potential relevance of ‘the fact that the work…must be carried out personally by the worker’. This is concerned more with what happened, the primacy of facts, rather than the contractual obligations between the parties.
As the preamble and the structure of the legal test make clear, the criteria are designed to ensure the inclusion of ‘the most vulnerable workers’ within the scope of the category. This requires a court to avoid what Martha Nussbaum has described as ‘lofty formalism’. Wise ‘perception’ demands that judges attend to the real disadvantages of people in their day-to-day lives. In this sense, Deliveroo represents a failure of judicial ‘perception’ and a triumph of ‘lofty formalism’.
Having misapplied the relevant law to the employment situation of Riders, the Supreme Court then proceeded to misapply the substantive law on freedom of association under Article 11. According to the Supreme Court, ‘there is nothing in the UK legislation to stop the Riders from forming their own union…There is also nothing to prevent Deliveroo from engaging in collective bargaining with Union to seek to agree the terms and conditions’ .
The ‘worker’ category is fundamental to all trade union rights under domestic law. Without worker status, anti-union discrimination can be perpetrated against self-employed Riders with legal impunity. This is because the relevant provisions, such as the detriment protections under TULRCA section 146, would not apply. Where organisers of strike action commit certain listed economic torts, it is possible to claim a ‘trade dispute defence’ under TULRCA. The scope of this ‘golden formula’ is limited to ‘a dispute between workers and their employer’ (section 244). If Riders are not workers, any dispute with Deliveroo is incapable of being a ‘trade dispute’. In these circumstances, as established in Wilson v UK (2002), ‘their freedom to belong to a trade union, for the protection of their interests, becomes illusory. It is the role of the State to ensure that trade union members are not prevented or restrained from using their union to represent them in attempts to regulate their relations with employers’ . Even accepting that there is no positive obligation under Article 11 to maintain the Schedule A1 procedure, a minimal framework of voluntary collective bargaining depends upon fundamental legal protections from trade union victimisation. Without these minimal legal protections, the very foundations of the right to collective bargaining and the right that the trade union should be heard are removed. There is also the added spectre of competition law restrictions on collective activity which may bite once Riders are categorised as independent entrepreneurs.
There can be little doubt what Strasbourg would make of this mess. Whether the claimants can afford to wait years to bring their rights home is another matter.