The bicycle couriers of meal delivery service Deliveroo were not independent entrepreneurs, but employees. That has the Supreme Court decided on Friday. With that ruling it has been definitively established that Deliveroo’s construction to force delivery drivers to work as freelancers is not allowed. Deliveroo has since left the Netherlands, but the ruling has been followed with great interest because there could be consequences for the 1.2 million self-employed in the Netherlands.
1 Why has the Supreme Court ruled on Deliveroo?
The British company Deliveroo, which had been active in the Netherlands since 2015, decided in 2018 that bicycle couriers would no longer be employed, but would have to work as independent entrepreneurs. The platform itself, Deliveroo argued in the lawsuits subsequently filed on behalf of the trade union FNV, was only a mediator between the bicycle courier and the customer. The various judges disagreed: until an appeal, the verdict was that there was a so-called authority relationship between Deliveroo and the couriers and that they should therefore be regarded as employees. Deliveroo appealed to the Supreme Court, but decided not to wait for the verdict. At the end of last year, the company left the Netherlands; some of the couriers received financial compensation for this.
2 Why was this verdict awaited? Deliveroo is already gone, isn’t it?
Deliveroo is not the only company that employs freelancers in the workplace. There are currently about 1.2 million self-employed persons in the Netherlands and that number is still growing daily. For years there has been discussion about the question of what the boundary is between an employee and an independent entrepreneur who hires himself out, the so-called self-employed person without employees. Due to the ever-increasing popularity of this construction, the discussion about the demarcation has become increasingly urgent, especially in situations where the employee and the self-employed do the same job.
Trade unions, but also politicians, are concerned about this group of bogus self-employed people. A clear definition is still awaited, which also makes it difficult for the Labor Inspectorate or the Tax and Customs Administration to enforce. A ruling by the Supreme Court could have provided that clarity. But while the courts in other dossiers, such as the climate or nitrogen, have tightly defined the frameworks for politics, the Supreme Court now very emphatically refers back to politics. According to the Supreme Court, the question of whether there is reason for further general rules or principles to determine whether an agreement is an employment contract, partly to delimit working as a self-employed person, is of interest to the legislator. […] Because the legislator is working on this subject, the Supreme Court currently sees no reason for legal development.”
3 What’s the problem with bogus self-employed people?
After the economic crisis in 2008, it was initially mainly employers who were responsible for the growth in the number of self-employed persons without employees, who used them for their so-called flexible layer. The big advantage for them: no employer charges or complicated dismissal procedures. In recent years, it has increasingly been employees themselves who opt for self-employment, especially in sectors such as healthcare and education. They have more net left over and they have more freedom.
Read also: The self-employed person has the say in healthcare and education
For society as a whole, the self-employed construction has the major disadvantage that there is no or less contribution to social security and that most self-employed people do not build up a supplementary pension, which means that they will mainly depend on the state pension later on.
4 Why is bogus self-employment so difficult to tackle?
The discussion revolves around the concept of authority relationship. Whoever is employed by an employer falls under his authority, which means, among other things, that the employer determines how the work should be done and when the employee must start working (for example, in roster shifts). If a self-employed person is deployed in the same way and does the same work as colleagues who are employed, there may also be a relationship of authority and the self-employed person is therefore an employee. With all the associated advantages and disadvantages, for both parties.
To determine whether the self-employed person is an employee in disguise, various factors are currently being looked at, such as whether the boss (or an algorithm, in the case of platform companies) can determine how and when the work should be done. But also which work the self-employed person does. If that work is part of the regular activities of the organization, there is a good chance that there should be an employment contract. But that sounds simpler than it is. The receptionist who works behind the counter at one company all year round on a freelance contract is then a bogus self-employed person. But what if she does that job for a few days or weeks and then moves on to another client? And where is the limit then?
Minister Karien van Gennip (Social Affairs, CDA) has announced that as of January 1, 2025 there must be more clarity about the weight assigned to the various factors. The main problem is that the cabinet wants to tackle bogus self-employment, but does not want to get in the way of real entrepreneurs.
5 What are the reactions to the statement?
Trade union FNV is satisfied. “This is the long-awaited and very justified verdict for Deliveroo delivery drivers and for all those other people who have been forced into bogus self-employment through strange constructions,” said Vice President Zakaria Boufangacha on Friday morning. According to him, the ruling is of wider importance. “After all, in many more places people do work where dependence is greater than independence. Think of childcare, broadcasters, healthcare and education.”
Professor of employment law Jaap van Slooten, who also works at law firm Stibbe and assists platforms there, among other things, does not see the landslide that was predicted in recent months in this judgment. The presumption was that the Supreme Court could rule that the work itself would be decisive for the question of whether you are an employee or not. So: anyone who does work within an organization that is also regularly done by employees would not be able to do this as a self-employed person. This would immediately put an end to the use of self-employed persons in, for example, healthcare or education.
That didn’t happen. “The Supreme Court has once again confirmed that all circumstances of the case must be taken into account in the assessment,” said Van Slooten. In his view, this means that the Supreme Court is actually saying that no clear solution can be found in current law for the desired dividing line. “At the ministry they probably would have liked it if the judge had provided clarity. Now the ball is back in the court of politics.”