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Deliveroo drops unenforceable ‘don’t sue us’ clause and faces new worker status claim

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27/04/2017

Courier firm, Deliveroo, is the latest to face a ‘worker status’ claim from its couriers. It has also agreed to remove an unenforceable clause from its contracts with couriers that prevents them from claiming worker or employee status.  The clause was challenged by a cross-party group of MPS during a Work and Pensions Select Committee.

The Committee was investigating how people working in the gig economy (numbering around five million people in the UK) are supported by their ‘employers’ in order to reduce reliance on state benefits and the welfare system. Chief Executives from Amazon, Uber and Hermes were questioned on whether their business models could operate if staff were employed traditionally rather than treated as ‘self-employed’.  Their evidence was that they could but that the trade-off would be less flexibility and opportunities for their workers. Deliveroo stressed the importance of flexibility for its staff claiming that 85% of them used it as a supplementary income stream and Hermes emphasised that the couriers were “their own bosses”.  In response, the Committee Chair observed, “You are not paying national insurance, you are not covering costs which taxpayers have to pick up. It is a marvellous model if you can get away with it”.

As highlighted by recent cases such as Uber, Citysprint and Pimlico Plumbers, workers are entitled to paid holiday, pensions auto-enrolment and national minimum wage. For more information click here.

In related developments, the Central Arbitration Committee (CAC) is set to determine the employment status of Deliveroo couriers on 24 and 25 May 2017. The Independent Workers Union of Great Britain (IWGB) had made a formal union recognition request to Deliveroo but Deliveroo has resisted this request stating that its couriers are not workers.  The question of the couriers’ status will now be formally determined by the CAC.  A claim has also been launched in the Employment Tribunal by a number of Deliveroo couriers claiming that they have worker status.

The trend towards self-employed individuals having worker status is undoubtedly gathering force. The Government has recently published an employment status review (a precursor to the ongoing Taylor review) suggesting a number of options, the most radical being a rebuttable presumption of employee status.

If you would like further advice on this topic please contact David Smedley or Andrew Rayment.

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