Deliveroo in Belgium: its couriers are self-employed workers and not employees rules Brussels court

The Labour Tribunal of Brussels concludes that couriers are self-employed, not employees, especially since they are free to organise their work and working time. This decision could set a precedent in discussions of the nature of the employment relationship in gig economy platforms, but the specific situation of each platform must, of course, be examined on a case-by-case basis.

This reminds us that if you collaborate with self-employed persons, you must ensure that the concrete implementation of the self-employed collaboration does not hint at the existence of a relationship of subordination, and best practices must be applied, for example, with regard to instructions, schedules, absences, evaluations, etc.

Gig economy for the first time before the Belgian Labour Tribunal

The “gig” economy is based on the principle of a sharing economy (exchange between peers, professionals or not). These exchanges can concern goods, services and knowledge. Various sectors of activity are directly concerned by the collaborative economy, such as transportation (car rental between individuals, carpooling), assistance services between individuals (gardening, babysitting, pet care), food (meal preparation, etc.), education (online courses, school remediation, etc.). When these exchanges are remunerated, and workers make them their work activity, the gig economy poses huge challenges to existing models of employment relationships.

While initially the question was raised as to whether a platform could be a party to an employment relationship, the question now increasingly arises as to the nature of the employment relationship that the platform enters into with the employee.

In a similar way to a “traditional” employment relationship, the parties are free to choose the nature of the employment relationship: salaried worker or self-employed. However, it is important that the chosen designation corresponds to the actual circumstances of service provision. If there are sufficient elements in the way the relationship is carried out that are incompatible with the designation given by the parties, the relationship could be reclassified.

In Belgium, the Administrative Commission for the regulation of Employment Relationships has already been asked whether there is an employment relationship between a courier and Deliveroo; it considered that the collaboration did not have the characteristics of a self-employed relationship, but rather that of an employer–employee relationship. The Administrative Commission for the regulation of Employment Relationships had also already ruled on Uber cases. However, no Belgian Labour Tribunal had yet ruled on the matter, until now.

The Labour Auditorate (which is the public prosecutor’s office for all matters falling within the competence of the labour courts) lodged the case before the Labour Tribunal of Brussels, after having investigated the working conditions of Deliveroo couriers for more than two years, during which it established several infringements of regulations specific to employees, and in particular of regulations governing social security for employees.

Several couriers joined the case (since, like the Auditorate, they considered that they should be considered employees of the platform), demanding the application of the labour law provisions, including the application of wage scales, reimbursement of expenses, compliance with the collective bargaining agreements concluded in the “Transport and Logistics” Joint Committees (nos. 140 and 140.03), among others.

The Tribunal concluded that there is no reason to reclassify the employment relationship between Deliveroo and the couriers as an employment contract.

Favourable tax regime

The Labour Tribunal also ruled on the application of the favourable gig economy tax regime, which, according to the Tribunal, does not apply to courier services. In a nutshell,  under certain conditions (notably that the income from the platform economy does not exceed EUR 6,390.00 per year), incomes from the collaborative economy are considered as “other income” (“revenus divers”), taxable at a rate of 20% after deduction of 50% of flat-rate expenses. Authorised platforms must withhold withholding tax on income from the collaborative economy at a rate of 10.70% of the gross amount of the income. A law of 18 July 2018 had introduced a full tax exemption, but this law was rescinded by the Constitutional Court in a judgment of 23 April 2020. Yet, the Constitutional Court had maintained the effects of that law until 31 December 2020, so that this favourable tax regime was still in effect for the Deliveroo case submitted to the Labour Court of Brussels. The Labour Court held that the conditions for the application of this tax exemption were not met, in particular, because the services must be rendered to third parties (as regards Deliveroo, it was about the delivery of goods, not ”services rendered to third parties”), and because the services can only be rendered to individuals as natural persons (as regards Deliveroo, the beneficiaries are restaurants, so professionals).

Existence of an employment contract

As to the existence of an employment contract, the Tribunal ruled as follows.

First, the Tribunal considered that the relationship between the couriers and Deliveroo falls within the scope of “freight transport” activity as defined in the Programme Law of 27 December 2006.

In this sector (as in others, such as cleaning or construction), the nature of the employment relationship must be examined in light of eight socio-economic criteria, such as the absence of a financial or economic risk for the courier; the absence of decision-making power over the company’s financial resources (i.e., the platform); the absence of decision-making power over the company’s purchasing policy; the absence of any possibility of employing personnel to perform the agreed work; working with a vehicle not owned by the worker; etc.

The Labour Tribunal presumed the existence of an employment contract, after having assessed these socio-economic criteria specific to the freight transport sector.

However, this is only a presumption. This presumption can be rebutted by assessing four general criteria which serve to determine the nature of an employment relationship. These criteria are: the will of the parties; freedom in the organisation of working time; freedom in the organisation of work; and the existence of hierarchical control.

The Tribunal analysed these general criteria and found that they rebut the presumption of the existence of an employment contract. For the Tribunal:

• It is the will of the parties (according to the contractual terms of their collaboration) to provide independent services and to conclude an agreement to this effect.
• The freedom of couriers to organise their working time seems not to be limited. More specifically, the system of pre-booked time slots is not a restriction on the couriers’ freedom to organise their working time.
• The couriers’ freedom to organise their work seems not to be limited either. Indeed, according to the Tribunal, couriers are free to disconnect from the platform whenever they wish and they are not obliged to accept deliveries as long as they are not connected. A courier is only bound to carry out an order according to certain guidelines when s/he has accepted a specific order.
• Finally, the Tribunal considered that the couriers’ declarations in the Labour Auditorate’s conclusions do not show that the platform exercised concrete hierarchical control.

Consequently, the Tribunal declares the claims of the Labour Auditorate and the couriers unfounded.

This decision could set a precedent in discussions of the nature of the employment relationship in gig economy platforms. The specific situation of each platform must, of course, be examined on a case-by-case basis.

New package of measures designed to improve employment conditions for digital platform workers at EU level

Coincidentally, the day after this Deliveroo decision, the European Commission introduced a new package of measures designed to improve employment conditions for digital platform workers. Under a new set of proposals published on 9 December 2021, the EU seeks to provide enhanced rights for digital platform workers. The package includes a Communication setting out the EU’s approach to the gig economy, a draft Directive with concrete measures to enhance platform workers’ rights and draft Guidelines on how EU competition law applies to attempts by self-employed gig economy actors to bargain collectively.

The proposed Directive would introduce criteria to assess whether a platform should be considered an “employer”; if two of these criteria, which are set out in Article 4(2) of the draft Directive, are met, there will be a legal presumption that the platform is an employer. This presumption can be contested by platforms, which would have the burden of demonstrating that their arrangements do not constitute employment relationships.

Workers for platforms that are classified as employers would then enjoy enhanced legal protection and benefits. In particular, they would have a right to a minimum wage in Member States that have one, collective bargaining, working time and health protection, the right to paid leave, enhanced protection against work accidents, unemployment and sickness benefit and contributory pensions.

The Directive also includes provisions on the use of algorithms by digital platforms, which would increase transparency around, and monitoring of, their use and give both workers and genuinely self-employed individuals the right to contest automated decisions.

The package also includes draft Guidelines on how self-employed individuals operating in the platform economy could negotiate collectively to improve working conditions without falling foul of EU competition law.

Of course, it will be some time before these proposals become law and they may change along the way. There will be an eight-week consultation with stakeholders on the Guidelines before they are adopted, while the proposed Directive will be discussed by the European Parliament and the Council of Ministers. Once a final Directive is adopted, Member States will have two years to implement its provisions nationally.

Claeys & Engels will be following these developments closely.
Thomas Douillet, Claeys & Engels