On June 24, the UK’s Court of Appeal ruled that riders working for work services platform and food delivery firm Deliveroo were self-employed, which seemingly stands in opposition to a landmark UK Supreme Court ruling earlier this year that transport and food delivery platform Uber must classify its drivers as employees rather than self-employed. The difference: The Deliveroo ruling hinged on the fact that Deliveroo’s riders did not have to undertake the work personally.

Deliveroo case. The Deliveroo case concerned collective bargaining rights claimed by a union representing Deliveroo riders. The Independent Workers Union of Great Britain applied to the Central Arbitration Committee, under the compulsory procedures in the Trade Union and Labour Relations (Consolidation) Act 1992, to be recognized by Deliveroo as the trade union representing riders in its “CKT [Camden & Kentish Town] food delivery zone” for collective bargaining.

The Central Arbitration Committee declined to accept the application on the basis that the riders were not “workers” within the meaning of the 1992 Act because Deliveroo’s contract terms did not require them to provide the services personally. They were permitted under the contract, and in practice, to provide a substitute to perform their work.

The challenge. The union sought permission to challenge that decision by way of judicial review. The union contended that the definition of worker in the 1992 Act should be interpreted in a way to allow Deliveroo riders to exercise their right to form and join a trade union under Article 11 of the European Convention on Human Rights. Article 11 states: “No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others.”

The Court of Appeal noted that an obligation of personal service was an “indispensable feature of the relationship of employer and worker” and not a “parochial peculiarity” of UK law. The court saw no reason why its importance should be any the less in the context of Article 11. It also rejected the union’s argument that the frequency of Deliveroo riders exercising their right to substitute was a relevant factor. Any test based on the frequency with which the right to substitute was exercised “would be unacceptably uncertain,” with riders working on identical terms being treated differently depending on how often they might individually have chosen to exercise their right.

The Court of Appeal went on to address the potential relevance of the UK Supreme Court’s decision where Uber drivers were found to be workers. It noted that that judgment had not been about personal service, as Uber drivers did not have a right to substitute, and the case had not concerned Article 11 of the European Convention on Human Rights relating to freedom of association.

Employment relationship. The Court of Appeal’s judgment provides important guidance on what constitutes an “employment relationship” in the context of personal service. In another important case on employment status, Pimlico Plumbers Ltd v Smith, the Supreme Court noted that the “sole test” in deciding whether someone was a worker was whether there was an obligation of personal performance. The Court of Appeal decision confirms that, where there is a clear and genuine right of substitution, there are no other appropriate tests to consider.

The Uber difference. The problem for Uber was that the contractual documentation which purported to label drivers as self-employed did not reflect the reality of the agreed working relationship. The message for employers is to consider first how you want to operate your business and how you will manage your workforce. The contracts with the staff should then reflect this strategy.

However, there is still considerable uncertainty in relation to the classification of workers. As one of the Court of Appeal judges put it: “it may be thought that those in the gig economy have a particular need of the right to organize as a trade union. So, I quite accept that there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate.”