Deliveroo’s delivery drivers are employees and not self-employed, rules the Dutch Supreme Court

Deliveroo’s delivery drivers were indeed employed under an employment contract, the Dutch Supreme Court ruled in a judgement today.

The Supreme Court upheld the decision previously passed by the Amsterdam Court of Appeal and sided with the opinion of the Advocate General.

With this ruling, the Netherlands is further showing its intent to regulate the gig economy and probably makes it difficult for Deliveroo to consider re-entering the market.

A fundamental case on gig workers

Deliveroo, a British online food delivery company, entered the Netherlands in 2015 where it worked with the delivery workers on a temporary employment agreement.

In 2018, the company changed that arrangement and entered into agreements for services and essentially began treating delivery workers as self-employed or gig workers.

A number of online companies rely on gig workers, who do temporary or freelance work as an independent contractor but lack benefits enjoyed by full-time employees.

FNV, the largest Dutch trade union, filed a collective action against Deliveroo under article 3:305a of Dutch Civil Code (DCC).

The trade union stated that Deliveroo riders are employees entitled to employee rights such as sickness pay and protection against unreasonable dismissal.

It invoked article 7:610 of DCC, which is a provision of mandatory law that qualifies an employment if the criteria of work, wages, and control are met.

The FNV argued that since all the three criterias were met in the case of Deliveroo delivery drivers, the judge should call it as employment and not self-employed work as structured in the paper.

The Amsterdam Court of Appeal ruled that FNV had a cause of action and that Deliveroo riders qualify as employees despite their contract saying otherwise.

Supreme Court Judgement on Deliveroo’s appeal

After a sub-district court and the Amsterdam Court of Appeal ruled that FNV had a cause of action, Deliveroo contested the ruling.

On June 17, 2022, the Advocate General (AG) Ruth De Bock issued an advisory opinion even though the Supreme Court is not bound by the opinions of the AG.

In a 125 page opinion in Dutch, she argued that the decision of the court of appeal can be upheld, adding that FNV had a cause of action and Deliveroo delivery workers were employees.

The opinion also outlined the platform-based work and the issue around qualifying it as employment, setting a fundamental precedent for possible regulation in the gig economy.

In its decision, the Supreme Court argued that whether there is an employment contract depends on all the circumstances of the case.

The ruling explains assessing those circumstances and then ruling that the Deliveroo delivery drivers had an employment contract.

“According to the Supreme Court, the court’s opinion is not legally incorrect and also comprehensively reasoned.”

The court also acknowledged that the freedom of the delivery drivers to work when they want and to be replaced points in the direction that there were no employment contracts “between Deliveroo and the delivery drivers.”

However, the court ruled on the basis of the other circumstances of the case and deemed the practical replacement option for the delivery drivers to be small.

The Supreme Court’s ruling was provisionally set for December 23, 2022, but the ruling today leaves the door open for legislators to enact further general rules or principles around the gig economy as well as working as an independent contractor or entrepreneur.

Deliveroo’s exit and impact of the ruling

There won’t be any immediate impact of this ruling on Deliveroo, which exited the Netherlands in November last year by negotiating a compensation package for its riders in the country.

The company had claimed that the Netherlands contributed to just 1 per cent of its gross transaction value (GTV) in the first half of 2022.

Its consultation concluded that “keeping a top market position in the Netherlands would require unreasonable investment with an uncertain long term return.”

We have reached out to Deliveroo for a statement and will update this story when we hear from them.

Gig work, the job carried out by many for platform-based companies, was once seen as the future of work but it immediately turned into a contentious issue.

Jitse Groen, the chief executive of Just Eat Takeaway had said the gig-economy model “comes at the expense of society and workers themselves.”

The most common criticism being that gig workers lack protection and fair pay and the work is not as flexible as it seems.

Earlier this week, Just Eat Takeaway laid off 1,700 delivery couriers across the UK and announced its return to the gig-economy model.

“Just Eat UK is reorganising and simplifying its delivery operation as part of the ongoing goal of improving efficiency. As part of this process we have proposed to transition away from the worker model for couriers,” the company said.

The announcement by JET is a major setback for gig workers but the decision by the highest court in the Netherlands today paves the way for legislators to mull stronger gig worker rights.

A draft EU rule aims to recognise European gig workers as employees with “rights to pensions, paid leave and workplace accident insurance.”

The draft labour rules approved by European Union lawmakers in February are being further negotiated by MEPs and representatives from the governments of all EU states.

If this becomes law then it will be the first big win for gig workers in Europe and possibly become a precedent for lawmakers around the world trying to offer better working conditions to gig workers.