Excitement surrounded the ruling of the Supreme Court on the question of whether Deliveroo’s meal deliverers in the Netherlands were working under an employment contract. On March 24, 2023, the Supreme Court ruled and the aforementioned question was answered in the affirmative: Deliveroo’s meal delivery drivers are employees, not self-employed. What does this mean for labor law practice? And do other developments await us?
EMPLOYMENT CONTRACT REQUIREMENTS
The following legal requirements apply to the assumption of an employment contract:
• Labor: the employee performs labor for a certain period of time;
• Authority: the employee does so under the authority of the employer; and
• Wage: as compensation for performing labor, the employer pays wages to the employee.
It follows from previous case law, that in answering the qualification question whether there is an employment contract or a contract for services, it is not only important what rights and obligations the parties have agreed upon, but also how the parties implement them in practice.
SUPREME COURT: ALL CIRCUMSTANCES OF THE CASE WEIGH IN
In the Deliveroo case, the Supreme Court ruled that whether an agreement qualifies as an employment contract or a contract for services depends on all the circumstances of the case considered together. The Supreme Court lists examples of circumstances that weigh in on this, including the nature and duration of the work, the embedding of the work in the organization and to what extent the person performing the work behaves as an independent contractor. In addition, the Supreme Court clarified that the weight to be given to a contractual provision also depends on the extent to which that provision is given meaning in practice.
According to the Supreme Court, the fact that the meal deliverers enjoyed a certain freedom with respect to the performance of the work (see, by way of illustration, the two circumstances referred to below) – which could point to entrepreneurship rather than an employer-employee relationship – does not necessarily mean that there cannot be an employment contract. The connection with other circumstances can lead to the fact that the agreement does qualify as an employment contract, which was the case here.
The Supreme Court gives specific attention to two circumstances:
• The freedom to appear or not to appear at work or accept assignments does not in itself exclude the existence of an employment contract. After all, what is also important is what applies if the meal deliverer does appear or accept an assignment.
• The freedom of the meal deliverers to be replaced is not in itself a reason to assume that there cannot be an employment contract. In this particular case, the fact that the replacement option was hardly ever used in practice played a role.
LEGISLATOR, YOU’RE UP?
Although the Supreme Court’s ruling provides additional clarity, not all questions of qualification will be a thing of the past from now on. Whether someone qualifies as an employee or an independent contractor remains a gray area, and very dependent on all circumstances. In addition, the issue of whether someone should qualify as an employee or a self-employed person is the subject of a broader social debate. The Supreme Court has also recognized this in so many words by referring to the Dutch and European legislature.
The subject is high on the political agenda. This follows among other things from a letter from the Minister of Social Affairs and Employment to the House of Representatives (Tweede Kamer) dated December 16, 2022. In this letter, the Minister mentions that the government intends to increase clarity about who is an employee and who is self-employed through (among other things) (i) the further interpretation of the open norm “working in the service of” (the authority criterion), and (ii) the introduction of a legal presumption of an employment contract. We will keep an eye on these developments.
Do you have questions following the ruling, or want to know if the ruling has implications for your organization or agreement? Feel free to contact us, we’d be happy to look into it with you.