While the gig economy gives both businesses and workers more flexibility, startups reliant on the model have recently faced a slew of legal challenges about the status of their workers. Now, Deliveroo, the food-delivery startup, has become the latest company to be brought before a tribunal.
The case will be heard by the Central Arbitration Committee, the tribunal that oversees the regulation of Britain’s collective bargaining law, after Independent Workers of Great Britain (IWGB) claimed that Deliveroo “bogusly classes” its riders as independent contractors rather than workers. If the trade union wins the hearing, which is scheduled to take place on May 24 and May 25, then Deliveroo’s riders could be entitled to receive the minimum wage, paid holidays, protection against discrimination and other employment rights.
This is the latest in a string of hearings where businesses with a flexible workforce have faced legal questions surrounding the status of their workers. For instance, IWGB recently challenged CitySprint, the courier company. Unite, the trade union, also brought Uber before a tribunal in October. The trade unions won both those cases. And in February, Pimlico Plumbers, the plumbing company, lost its appeal after a court ruled that one of the business’ workers should be classed as employed rather than a self-employed contractor. Pimlico Plumbers has said that it’s considering appealing to the supreme court.
Companies are also under pressure from the government, which wants to ensure employment rights aren’t abused. In October 2016, HM Revenue and Customs launched a specialist unit to investigate companies that rely on self-employed staff in a deliberate attempt to avoid providing employment protections.
Commenting on Deliveroo’s upcoming tribunal, Jason Moyer-Lee, general secretary at IWGB, said: “For years employers in the so-called gig economy have been able to get away with unlawfully depriving their workers of employment rights to which they are legally entitled. The chickens are now coming home to roost. In this tribunal hearing we intend to expose Deliveroo’s sham operations and force them to finally reckon with the rule of law.”
In response, Deliveroo has defended its practices. A spokesperson said: “The IWGB do not accurately represent the vast majority of our riders who overwhelmingly support the flexibility and good pay which comes with being self employed. That is no doubt why the IWGB is seeking recognition in just one small part of London. We look forward to engaging with the Central Arbitration Committee’s hearing as they assess the credibility of the IWGB’s claim.”
While these legal cases may raise questions about the status of workers in the gig economy, here’s hoping a balance can be found between protecting workers’ rights and giving startups the flexibility they need to thrive.