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Netherlands – Contractor or employee? The gig economy saga continues…

Written by
Bronsgeest Deur Advocaten, leading law firm in the Netherlands specialised in HR and employment law.
A new ruling in the Netherlands has held that Deliveroo riders are employees and not self-employed contractors. This article explores its findings, putting them in the context of the continuing debate on gig economy workers’ status.

Employee or independent contractor? The legal status of workers in so-called platform companies keeps demanding public attention. What is the status of these workers, both with regard to civil law and tax-related matters? In connection with civil matters, it is important to ascertain whether or not these working arrangements are governed by Dutch employment law and the workers therefore benefit from the applicable rules on protection from dismissal, the continued payment of wages during illness and (where applicable) the applicability of a Collective Labour Agreement (CLA) among other advantages. As regards tax, the issue is whether or not remuneration paid to these workers is subject to income tax and the deduction of other social contributions.

For platform companies, such as Uber and Deliveroo for example, the answer to that question is obvious: the riders and drivers are independent contractors; not employees. But in both political debate and in society, opinions are polarised and legislators are struggling to find an answer. The fact that there is no unambiguous answer to this question was once again made clear in two separate judgments rendered by the District Court of Amsterdam on 15 January 2019, which ruled that Deliveroo riders can in fact lay claim to the existence of an employment contract between them and the company and that they are therefore subject to the Professional Road Transport CLA. This ruling is in direct opposition to another ruling by the same District Court of Amsterdam in July 2018, which held that the Deliveroo rider Sytze Ferweda should in fact be considered an independent contractor and not an employee.

What makes this question so hard to answer? The difficulty mainly arises from the fact that the answer to the question depends on the existence of a ‘relationship of authority’. If it exists, there will, in principle, be an employment agreement. In assessing whether a relationship of authority exists, all circumstances of the case must be taken into account and weighed up. For the average employer this already raises questions. But for platform companies such as Uber and Deliveroo, the available work is divided among the riders and drivers by an app based on an algorithm. In the case of Deliveroo, the company has explicitly agreed with the riders that they themselves may decide on whether they are available for work and may refuse a delivery at any point in time (even shortly before delivery is due). They may also decide not to go to work, even if they have already booked a period (to work), without any consequences whatsoever and they may arrange to be replaced by a third party, who can perform the work in their place, at any time. Is it even possible that such a set of circumstances could result in a relationship of authority?

On paper at least, Deliveroo’s influence on the manner in which riders execute their activities is almost non-existent, and therefore it would appear that there is no relationship of authority between them and the company. According to the recent ruling by the District Court in Amsterdam, however, this is a mere illusion and in practice, riders are not at all at liberty to schedule their own activities. Since riders get paid per delivery, it is essential for a rider to make as many deliveries as possible in order to earn a substantial amount of income. This means a rider cannot easily refuse deliveries. Nor can riders spontaneously decide to log on to the app and run deliveries, because they run the risk that of there being enough riders already working at that time, meaning that specific period is already fully staffed. It may well be possible to book a certain period, but if a rider subsequently decides not to work that period after all, this may come back to ‘haunt’ him or her in as the algorithm reduces the number of deliveries her or she is given. Moreover, riders that consistently show up at the booked times are granted priority when logging on for the more lucrative time slots.

Whereas the ruling by the District Court in the matter of Sytze Ferwerda was mainly based on the personal circumstances of that case, the January judgment is much more based on the situation of riders in general. It remains to be seen if this approach by the District Court is upheld and if the majority of riders would even want employee status: the trade union FNV seems to think so, but Deliveroo thinks not and for that reason has also communicated its intention to appeal. We will have to await the ruling by the Court of Appeal on the matter.

What both rulings do agree on is that it is up to the legislator to provide suitable legislation giving guidance on this question as soon as possible. Would the time be right for a separate, legally regulated agreement, drafted specifically for individuals working with platform organisations? In our opinion, the answer is a resounding yes: ‘platformisation’ is an unstoppable and novel development and current employment contract law would appear to be an off-the-peg solution that does not suit its shape.

Hylda Wiarda
Hylda Wiarda
Partner - Netherlands
Bronsgeest Deur Advocaten