Article 7: 610 paragraph 1 of the Dutch Civil Code states that an employment contract exists if three conditions are met: if the worker 1) performs work, 2) receives wages and 3) is employed by the other party (authority relationship). The labor component of an employment contract consists on the one hand of performing and on the other of the obligation to perform the work personally. A wage exists if the employer owes the employee compensation as a consideration for the work performed by the employee. The name that the parties attach to the compensation, but also the amount thereof, is not decisive in determining whether a reimbursement can be regarded as wage. The last criterion of an employment contract: the obligation to be “in the service” of the other. In particular, the authority of the employer to give the employee instructions and the employee’s obligation to follow those instructions distinguishes the employment contract from the assignment agreement (Article 7: 400 of the Dutch Civil Code).
The most prominent judgment in this series of case law is, without a doubt, the judgment in Groen / Schoevers. In this case, a tax adviser, in the conduct of his own business, taught at the Schoevers educational institution. When Schoevers wanted to terminate the agreement, Mr Groen stated that that was not just possible, since the parties would have an employment contract. In answering this question, the Supreme Court states that, first of all, consideration must be given to the intention of both parties at the conclusion of the agreement. In addition to the agreed contract, this intention must also be derived from the actual performance of the contract. Furthermore, circumstances such as a possible relationship of authority and the social positions of parties are relevant.
Deliveroo is a British company that was founded in 2013 and profiles itself as an internet network that offers a platform for home delivery of restaurant meals. Deliveroo became active in the Netherlands in June 2015.
In early 2018, the meal delivery service decided not to renew any of the employment contracts with its delivery staff. Instead, deliverers were to work as independent entrepreneurs for the company in accordance with so-called partner agreements. The company decided not to extend the employment contracts of the delivery staff and, upon expiry of their temporary contract, offered them the choice: continue as a self-employed person or stop as a delivery person at Deliveroo. According to Deliveroo, deliverers within the new agreement were given much more freedom to give substance to their work. The deliverers can decide for themselves where and when they want to work and can use substitutes. The FNV opposed this change. According to the trade union, in practice there was still a relationship between an employer and employee.
The subdistrict court agrees with the FNV. The relationship between Deliveroo and the deliverers has not changed substantially with the introduction of the new contract form. Among other things, it is important that the partner agreement is a standard contract that is fully and unilaterally drawn up by Deliveroo and is not negotiable. The significance of the written intention of the parties with regard to the type of agreement that they wish to conclude – an employment contract or an assignment agreement – is put into perspective by the court. To that end, the court considers that the more a contract has been negotiated, the greater the value that can be attached to the written record of that party’s intention. In the present case, however, there is a standard contract that is fully and unilaterally drawn up by Deliveroo and the content of which is not negotiable. In such a situation, the intention of the parties included in the contract cannot be given decisive significance.
The judge ruled that within the legal relationship there is still a relationship of authority between the company and the deliverers. The digital systems that Deliveroo uses for the scheduling of delivery staff and the delivery of meals play an important role in this. As a result, the freedom of delivery staff is considerably less in practice than the partner agreement suggests.
For example, deliverers can decide for themselves whether or not to accept an assignment, but refusal or low availability is likely to work to their disadvantage when they receive future assignments and receive bonuses. There is also little to no room for negotiating the tariff. In addition, according to the partner agreement, the deliverers have the option of being replaced, but in practice this provision is meaningless. After all, the moment between taking a delivery order and actually delivering a meal is so short that there will be no need to make use of the possibility of replacement. This is different if an entire service is taken over. However, a replacement must be approved in advance by Deliveroo. Because of this rule, a replacement also fits within a normal employment contract, especially since Deliveroo also has authority over the replacement during work.
Despite the high degree of freedom for the deliverers, in fact, nothing has changed substantially in relation to the situation in which the deliverers were still employees. Deliveroo has therefore wrongly appointed the deliverers as self-employed, according to the subdistrict court judge.
The court’s ruling can have far-reaching consequences for the fast-growing platform economy. Companies such as Deliveroo, Uber and PostNL have a lot of growth potential, partly because they do not have to pay social insurance premiums due to the use of self-employed people without employees. Moreover, self-employed people can be deployed in a more flexible way than employees. The Deliveroo pronunciation may change this. However, the judge will have to assess for each specific case whether or not there is false self-sufficiency.
Deliveroo has announced that it will appeal. The future will therefore teach us more about the position of the (false) self-employed.
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