Global Mobility & Payroll 5 April, 2023

Deliveroo drivers qualify as employees in the NL 

Crowe Peak/ Knowledge Hub/ Global Mobility & Payroll/

Deliveroo drivers qualify as employees in the NL 

According to the Supreme Court of the Netherlands, Deliveroo delivery drivers had been working as employees instead of as self-employed workers. This judgment is important for Dutch labor law because it may have implications for other companies working in an equivalent way. It is thereby of significant importance for the future of the gig economy in the Netherlands.  

Background of the case  

Deliveroo used to be a leading provider of home-delivery of food in the Netherlands. The delivery drivers that performed the delivery of the food to people’s homes for Deliveroo worked in the Netherlands under Dutch law contracts. The contracts at hand were described as “self-employment contracts”. As a result, the said delivery drivers were not employed by Deliveroo. They were merely performing the work as “independent contractors” working on Deliveroo’s behalf. This was beneficial for Deliveroo, as the fact that the drivers were not considered as employees meant that the company was not obliged to pay social contributions and pensions premiums for those workers in the Netherlands.  

Dutch Trade Union FNV decided to start a court procedure against this policy of Deliveroo. FNV stated that the delivery drivers were, in fact, not self-employed workers, but employees. Therefore, the self-employment contracts at hand should be qualified as employment contracts. In this context, FNV initiated legal proceedings against Deliveroo.  

The case was first examined by the competent subdistrict court and subsequently the relevant court of appeal. Both these courts decided in favor of FNV. They qualified the contracts at hand as employment contracts instead of self-employment contracts. In a last attempt to obtain a favorable judgement, Deliveroo appealed the judgment of the court of appeal to the Supreme Court. During this Supreme Court procedure, Deliveroo terminated its activities in the Netherlands. Nevertheless, the Supreme Court rendered its judgment, which was, again, in favor of FNV. The contracts of the deliverymen were thereby definitely qualified as employment contracts.  

Platform employees vs. “traditional” employees 

As this procedure against Deliveroo has tremendous impact on companies working in similar ways, it is important to understand the reasons behind this judgment. Firstly, an important element in this case, and in the judgment, is that Deliveroo employees can be characterized as so-called ‘platform employees’. This is a new type of employee that is on the rise in the ever-growing gig economy. The difference between platform employees and ‘traditional’ employees, is that platform employees are managed through algorithms, rather than managers. Platforms, such as Deliveroo, act as intermediaries between the workers and the final consumer of the product that is for sale. In that context, the workers involved are usually not recruited as employees of the platform, but as self-employed workers/freelancers who perform tasks (in this case, meal delivery) on behalf of the platform.  

The difference between being contracted as an employee, or being contracted as a self-employed worker is particularly relevant in the Netherlands, as employees enjoy many more benefits (in terms of inter alia dismissal and sickness) than the self-employed workers. Moreover, for employees, employers are obliged to pay social contributions and wage taxes. That said, the distinction between a self-employed worker and an employee is a complicated one under the Dutch law. Especially if it concerns a case of the so-called ‘pseudo-employment’. Under Dutch law, this is the case when a worker formally works (i.e., according to their contract) as a self-employed worker, but in fact performs similar work, under similar conditions to an employee who is or would be employed. To prevent pseudo-employment, the Dutch government has drawn up certain criteria to determine whether an agreement is an employment contract or not. These rules are formalized in the Deregulation of Assessment of Employment Relations Act (“DBA”). 

Supreme Court ruling   

The Dutch Supreme Court upheld the court of appeal’s judgment. Thereby, it confirmed that Deliveroo delivery drivers did work as employees. In its argumentation the Supreme Court substantiated that all relevant circumstances are important for answering the question whether there is an employment contract or not. Thereby, the Supreme Court has mentioned that the circumstance of whether the worker acts as an entrepreneur should be also taken into consideration. The Supreme Court stated that the agreement’s nature is relevant, as well as its practical implications. These implications include, among others, whether the workers can decide when and how long they work, whether they are allowed to replace themselves and whether they are responsible for choosing and maintaining the materials necessary for the job. This means that the Supreme Court takes the overall nature of the relationship as a starting point, rather than just the contractual agreement.  

This ruling is important for the development of Dutch labor law (and thereby the Dutch labor market) because it confirms that under Dutch law, when assessing whether someone qualifies as an employee, all circumstances of the situation must be considered. In addition, the Supreme Court stressed that when it comes to platform workers, the fact whether the workers behave as entrepreneurs, should be considered as well. In this context, Deliveroo had argued that the delivery workers were allowed to be replaced and had the freedom to decide themselves whether they wanted to work or not. According to Deliveroo, these two circumstances were not in accordance with the nature of an employment contract. The Supreme Court underlined that the assessment of a working relationship depends on all the relevant circumstances of the case, and that in this case, these circumstances led to the conclusion that the workers were employees of Deliveroo according to Dutch law.  

What does this judgment mean?  

The Deliveroo judgment is significant for the future of the gig economy in the Netherlands, as it means that companies such as Deliveroo can no longer offer self-employment contracts to their deliverymen. The companies must comply with the laws that apply to employment contracts in the Netherlands. In addition, this ruling is important for the human resource management of tech companies, because the judgment implies that the fact that people’s work is managed by means of a platform instead of a manager, does not necessarily lead to self-employment. Thereby, this Supreme Court judgment not only implies that Deliveroo (would it still have been active in the Netherlands) would have had to employ its delivery workers, but also that other companies in the gig economy should reconsider their labor relations.  

However, although this ruling is important for the position of delivery workers (see above), the Supreme Court emphasizes in this case that the judgment whether an agreement qualifies as employment agreement still depends on all circumstances of the case. Therefore, it cannot be said that all deliverymen managed by every platform are automatically considered as employees.  

If you want to check your situation or if you need more information related to self-employment versus employment, please contact our specialists.  

Crowe peak

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