Riders: Freelancers or employees?

Written on 24 Sep 2019

The so-called riders have been providing their services in the big cities of Spain for years. However, the nature of the relationship between them and the companies that contract their services (such as Glovoapp23, S.L. and Roodfoods Spain S.L., commonly known as Glovo and Deliveroo respectively), remains controversial. The rulings on the matter are diverse: while some defend their classification as Economically Dependent Self-Employed Workers ("TRADE") (thesis defended by companies) in others, it is stated that they are false freelancers and are therefore subject to an ordinary employment relationship (as maintained by the Labour Inspectorate).

On July 22nd, the Madrid Social Court No. 19 issued its most recent ruling on the matter. In this, the Social Court deems the lawsuit filed by the General Treasury of the Social Security against Deliveroo and declares that 532 riders were subject to an employment relationship with the company. Therefore, all the rights inherent to the employment relationship condition must be applied to them; including the right to obtain compensation for dismissal, since at the time of the ruling many of these workers no longer provided services for the company.

This ruling is especially relevant because at the moment there is no formal case-law in this matter, the sentences of the Social Courts do not reach 10 and the oldest is from 2018. In addition, this ruling is the only one with such a high number of workers. This pronouncement derives from a report of the Labour Inspection in 2018, which understood that these riders were linked by an employment relationship with the company and that, consequently, their classification as freelancers was incorrect.

However, in previous rulings some Courts have reached the opposite conclusion, on the basis of the Supreme Court ruling of 20 July 2010, which states that in order to determine whether or not there is an employment relationship, it is necessary to analyse the relationship between the parties. In particular, it is essential to examine if the worker depends on the Company to do his work and if the rider works for the company or for himself. For example, the Social Court of Madrid, in its judgement 284/2018 of 3 September 2018, declared that the plaintiff, a rider of Glovo, was a TRADE. In this case the Court considered that the defining notes of an employment relationship were not given, since:

  • The rider decides the how, where and when of the provision of services, and has complete control of his activity. There is no record of him submitting to an organizational structure, and he chooses when and how much to work (and therefore. how much to earn).
  • The company is not considered to exercise any type of disciplinary power, through the scoring system by which the distributors receive more points the more orders they complete. The Court understands the system as an incentive that rewards the quality and quantity of work done by the rider with more points, as a result of his ability to self-organize.
  • The deliveryman assumes the risk and responsibility of each order and responds to the customer. An example of this is that the main working tools (the vehicle and the mobile phone) are the property of the rider and that the retribution he receives depends directly on the quantity of orders he carries out.

However, the aforementioned judgement of 22 July (and the majority of judgments on the matter) defend the existence of an employment relationship and consider that the characteristic marks of an ordinary employment relationship are given, in line with what was declared by the Labour Inspectorate:

  • The company, especially the mobile app and the Deliveroo brand, owns the main tools for the development of the activity. Also, the mercantile relation is between the restaurants and Deliveroo, not the riders, because they do not assume any type of risk derived from this relation.
  • With regard to dependency, in this ruling the Court states that “the deliverymen have essentially carried out personal work under conditions organized and directed by the company”. The company instructed the workers on how to place orders and maintained exhaustive control over them. Furthermore, it is considered that a worker was incapable of carrying out the deliveries on his own: “it is clear that there is a lack of a business organisation in a minimally strict sense of the deliveries considered in isolation, to the point that it was necessary to explain to them the task to be carried out, to provide them with access to the means of work if necessary and even formal”.

These arguments have recently been ratified by the judgement of the High Court of Justice of Asturias, of 25 July, being the first judgement of a High Court of Justice dealing with the issue. The judge ruled that “It is unthinkable that the plaintiff could perform his job transporting food between restaurants and potential customers, as a self-employed worker, outside the platform and with their own means”.

Finally, it must be borne in mind that these judgments can be appealed. Therefore, it will be necessary to wait for the Supreme Court to pronounce and establish case-law. In the meantime, the Labour Inspectorate focuses its efforts on getting to know perfectly the internal functioning of these companies, in order to elucidate the true nature of the relationship (labour or mercantile) between riders and companies.