Friday 24 March marked the denouement of a long legal battle between trade union FNV and courier company Deliveroo. For a long time, it was unclear whether Deliveroo's couriers were self-employed or salaried. This uncertainty came to an end last Friday after the Supreme Court ruling. The answer was clear: Deliveroo's delivery drivers are working on the basis of an employment contract and are therefore salaried.
Background information
Since 2018, there has been much ado about Deliveroo's decision not to renew expiring employment contracts with delivery drivers. Instead, delivery drivers had to register themselves with the Chamber of Commerce as self-employed. FNV filed a lawsuit against the British courier company after this action by Deliveroo. After years of litigation, FNV was finally vindicated. With this, the Supreme Court went along (in part) with the earlier opinion of the Advocate General and upheld the judgment of the Court of Appeal.
Relevance
Deliveroo is not the only company with many self-employed workers who are in fact employees. This ruling has taken the next step towards putting an end to the false self-employment that many workers in the Netherlands face. Earlier, the court also ordered Uber to employ its drivers immediately and pay them according to the taxi collective labour agreement. With this court case, FNV had already set the tone to tackle tech platform companies such as Uber and Deliveroo. Furthermore, the ruling also has direct financial implications for Deliveroo workers. "Employees can now sue for all kinds of arrears. But the Tax Office and UWV can also get to work collecting arrears," the FNV said.
Furthermore, the judgment does not provide an entirely new perspective on the question of how an employment contract should be qualified. However, the Supreme Court did provide a clear list of which circumstances are relevant in the judgment. Among these circumstances, the Supreme Court has also clearly mentioned (for the first time) that the following circumstances: the embedding of the work, the entrepreneurial risk and the question whether the person performing the work behaves or can behave as an entrepreneur in the course of business, are important in the qualification of the contract.
Summing up circumstances
In addition to the aforementioned points, the Supreme Court in the judgment listed circumstances, which might require the agreement to be qualified as an employment contract. In total, the Supreme Court listed the following circumstances:
Incidentally, the Supreme Court did not specify which circumstance is decisive/weighs more heavily. The Supreme Court did rule that: the weight attaching to a contractual agreement also depends on the extent to which that clause actually has meaning for the party performing the work.
Position of Deliveroo
Deliveroo argued, among other things, the circumstance that the delivery drivers were free to work whenever they wanted and to be replaced. The Supreme Court ruled that when assessing whether an employment contract exists, all the circumstances of the case are important. While the circumstance cited by Deliveroo does suggest a certain degree of self-employment, there was a clear relationship of authority between Deliveroo and its employees. This was made clear, among other things, by the control that Deliveroo exercised over its employees through a login system. Thereby, in practice, hardly anyone allowed themselves to be replaced and this was certainly not a revenue model. For this reason, the Supreme Court also gave virtually no weight to the contractual arrangement in question. The latter is striking, as in previous cases more weight was often given to this circumstance. If the parties had contractually agreed that someone could be replaced, and this did occur in practice, it was precisely because of this agreement that it was ruled that there was no employment contract. This judgment seems to have made this agreement less relevant.
A look to the future
The commotion of this judgment will make many organisations realise (again) that they may have to look at how the working relationships within their organisation are designed. We see that mainly companies/sectors where many ZZP'ers are employed, including, for example, the healthcare, construction and IT sectors, will start to scrutinise contracts. In practice, commission contracts are now often used, while based on this judgment and previous rulings, they are most likely to be qualified as employment contracts. Yet we currently see little discussion about this, as many ZZP'ers do not want to have an employment contract at all. Of course, this does not mean that there is no risk in this for clients.
In addition, due to the DBA Act's enforcement moratorium, the tax authorities do not enforce on sham constructions unless there is malicious intent. Incidentally, the risk does remain that, despite this enforcement moratorium, the Tax Authorities may come knocking on the "ZZP'er"/employer's door after the civil court qualifies the ZZP'er's agreement as an employment contract. It is therefore important for a client to exclude this risk (including possible retrospective levies from the Tax Authorities and/or UWV) as far as possible in the assignment contract.
The enforcement moratorium will remain in place until 1 January 2025 at the latest. Although it is the cabinet's intention to come up with new legislation earlier. The cabinet is not expected to remain idle after this ruling. For instance, even the Supreme Court's ruling already refers to announced new Dutch/European legislation to solve the current problems (see, among others, parliamentary letter from the Minister of Social Affairs and Employment dated 16 December 2022).
Conclusion
For many companies and workers, this ruling will have a major impact. If you yourself have doubts about the design of working relationships within your company, feel free to contact our employment law specialists.