Spain – New Judicial Setback for Deliveroo

24 July 2019

The legal battle begun in Madrid on 21 May 2018 by the General Treasury of the Social Security System (TGSS) against Roodfoods Spain, S.L. (Deliveroo) and the co-defendant workers had its first victory on 22 July 2019, date on which Labour Court no. 19 of Madrid handed down Ruling no. 188/2019 (the “Ruling”) which considers that the co-defendant workers were subject to an employment relationship with Deliveroo, with the consequences inherent thereto.

The Ruling, which consists of 35 facts proven and six legal grounds, sets forth a detailed analysis of the conditions that lead to the existence of an employment relationship which are the voluntary nature, retribution, personally rendering, dependence and working on someone else’s behalf. In this article we briefly summarise the conclusions which the judge reached to uphold the intentions of the claim brought by the TGSS. For this purpose, the following points must be highlighted:

  1. That it is irrelevant the name that the parties give to the contract, since the essential part is the real content of the obligations assumed by the parties thereto.
  2. That the affected parties in proceedings 510/2018 provided the services personally and voluntarily, since it was not proven that the services were subcontracted or delegated to third parties.
  3. That the condition of retribution is present since, although the systems chosen were based on both work unit and time, these are fully accepted in labour legislation pursuant to the provisions of Article 26.3 of the Workers’ Statute.
  4. In terms of working on someone else’s behalf, the judge considers it proven because despite the fact that the affected parties used their own vehicles to make deliveries, the most important assets, the Deliveroo application and its brand, were controlled and provided by the company. Furthermore, the delivery people did not form part of the legal business between Deliveroo, the restaurant and the customer, where they were limited to making the delivery, the address of which was known precisely once the order was picked up from the restaurant. All of this leads to the conclusion that the delivery people never formed part of the contract and as such, never assumed the risks arising from said relationships.
  5. Finally and in relation to dependency, the First Instance Court concludes that the delivery people rendered their services in a manner organised and directed by Deliveroo, since said company prepared the delivery people by showing them explicative videos and providing informational brochures through which it proposed how they should introduce themselves or carry out the collection and delivery process of the orders, or even established behavioural rules, which leads to the conclusion that the relationship between Deliveroo and its delivery people was not only limited to a transport service where the essential component was the delivery of the order, but that Deliveroo set out guidelines of how such service should be rendered.

Furthermore, the margin of independence of the delivery people was practically inexistent, since, if the service offered by Deliveroo is not that of intermediation, but the promotion of products and facilitation of the ordering process between the restaurant and the client, it is evident that the delivery person does not have the option of carrying out the order as he/she deems fit, apart from choosing the transportation method and the route. In terms of the possibility of rejecting the order, this also came at a cost for the delivery person, since he/she could be excluded from the shifts in which he/she is interested. Finally, the judge stated that the delivery people involved in the proceedings lacked their own business structure, since the tasks to be performed had to be explained to them, they had to be provided with access to the work means and trained. Furthermore, Deliveroo managed the tips, determining their payment and including them in the bills, which were prepared by Deliveroo.

As shown, the Ruling implies a new legal blow to the company incorporated in July 2015, which has seen that yet again the Labour Court concludes that the relationship between the delivery people is that of an employment contract and not of renting services. Nevertheless, the Ruling is not yet final, since an appeal (so-called recurso de suplicación) may be filed before the High Court (Tribunal Superior de Justicia or TSJ) of Madrid. This means, in the event that an appeal is filed, it remains to be seen whether the TSJ of Madrid will confirm or not the Ruling handed down in the Court of First Instance.

For further information: Monika Bertram