Deliveroo has called on the government to change the law so it can give its couriers enhanced employment rights, it said this morning.
The food delivery business has submitted a response to the government's review of the so-called gig economy, saying the law currently prevents it from offering benefits such as sick pay to its couriers.
People who work for Deliveroo are currently classed as “self-employed”, the least protective of the three broad categories, which also include “workers” and “employees”.
What's the problem?
Self-employed people have no right to the national minimum wage, no right to be paid annual leave, and no right to sick pay or maternity or paternity leave.
Deliveroo has said it would happily provide some of these benefits, starting with insurance to cover injuries. The business "would like to go even further by offering exceptional riders shares in the company, to enable them to have a stake in Deliveroo’s growth", it added in a statement.
But it does not want to classify its couriers as “workers” as this would reduce their freedom to choose jobs as they please.
At the moment, Deliveroo's couriers are allowed to work for other on-demand businesses concurrently and "log on" whenever they want to. The company has said this would make it impossible for it to guarantee the national minimum wage, which is based on working for only one employer.
But this has not stopped Deliveroo from being criticised in the past for classifying its workers as self-employed, and a number of couriers have brought legal cases to challenge the label.
The furore was such that the government decided to set up a review on modern employment practices last year, headed by Labour politician Matthew Taylor.
What does Deliveroo want?
In advance of the publication of this report, Deliveroo is now calling for a new category of worker to be created which would allow employers to offer certain benefits without losing the flexibility which many Deliveroo workers enjoy.
"This new category would allow employees to be in control of their working hours, whilst enjoying some of the rights afforded to full-time staff," said Phillip Pepper, employment partner at law firm Shakespeare Martineau.
“Deliveroo’s call for a change is likely to be well-received within the industry, but it may have come too late in the game. Legislation is often slow to react to changing ways of working and with the Taylor review on modern employment practices due to be published any time now, it seems unlikely that its findings will reflect these calls."
Yet Paul Jennings, a partner at law firm Bates Wells Braithwaite who is pursuing test cases against CitySprint and Uber, said that new regulation is unnecessary.
“The idea that employers are prevented from providing basic rights, because of the established legal categories, is simply wrong. It is also entirely wrong to say that offering basic protections would in some way undermine flexibility," he said.
“In reality, a number of large employers – particularly within the gig economy – are categorising workers in such a way as to minimise both cost and risk. That is why, to date, the courts have issued such damning judgments in the gig economy cases.”
What are the risks?
Deliveroo's founder, Will Shu, is insistent that changes should be made to the law.
"The on-demand economy has changed the way people work and live. We want an environment in which both workers and businesses benefit from the opportunities these changes provide," he said.
"I still do deliveries every week so I know better than anyone the hard work that Deliveroo riders put in every day. It’s only right that they’re given the security they deserve whilst keeping the flexibility that they value."
Although there are many calls across the industry for changes in legislation, some worry that any intervention could be too heavy-handed.
"Flexible regulations that allow a larger range of employment models will allow new and better types of jobs to be created, and let existing gig economy workers benefit from better compensation now," said Sam Bowman, executive director of think tank the Adam Smith Institute.
"The big danger is that the government ends up stamping out this kind of innovation by trying to micromanage how businesses like Deliveroo and their riders can do business with each other."