Court of Amsterdam: deliverer Deliveroo is not an employee
The platform employee has become an integral part of society and Uber, Deliveroo, Foodora and Temper are the key players in the street scene.
While developments in the digital age are taking place at a rapid pace, the legal system does not seem to be able to keep up with these developments. Last week the District Court of Amsterdam indicated that if a socially undesirable construction has arised, it is up to the legislator to intervene.
In first instance, platform employee Sytze Ferwerda worked for Deliveroo on the basis of a fixed-term employment contract. From a cost perspective, Deliveroo had decided not to extend fixed-term employment contracts and have its platform employees work as self-employed persons (on the basis of a so called ZZP-contract, i.e. a contractor agreement). Following this decision, Sytze set up a sole proprietorship and continued its activities as a self-employed person. Eventually, Sytze started a procedure in which he claims to have an employment contract (anyway) with Deliveroo.
An interesting question in view of the rise of the platform employee and the public debate whether platform companies should not simply be seen as employers. In that case, platform companies would have to pay employer's contributions and possibly pension contributions, and labour law protection (amongst others in the event of dismissal) would apply.
The judge assesses, on the basis of the known holistic weighting, whether an employment contract exists. In that regard the following two questions need to be answered on the basis of the circumstances of the case.
1. What was the intention of the parties when entering into the agreement?
Interestingly, in answering this question, the court mainly looks at the contractual provisions in the agreement to determine what the parties had in mind. Naturally, in this case the agreement stipulated that the self-employed person could organise his activities completely freely, did not have to carry out his activities under the authority of Deliveroo and received compensation according to his results. It is noteworthy in this context that the court does not seem to attach any value to Sytze's argument that Deliveroo abused the circumstances by no longer extending all fixed-term contracts and - in fact - giving the employees only one option: to continue as a self-employed person. In that context, the court found it relevant that the deliverer himself had set up a sole proprietorship and had requested a ZZP-contract.
This seems to be an oversimplification because these circumstances can easily be manipulated by platform employers (i) by having delivery companies set up a sole proprietorship themselves, and (ii) having potential deliverers apply for their own services, as a result of which they - in fact - request a ZZP-contract themselves.
2. How did the parties implement the agreement?
In this context, the following elements were considered to be relevant:
- The deliverer can - unlike during his employment - refuse delivery instructions. A logged in deliverer is always free to refuse an order after which the order will be offered to another deliverer. Deliveroo's ranking system did not make this any different.
- The deliverer is not obliged to wear Deliveroo's clothing, may wear competitors' clothing and is free to work for competitors.
- No authority relationship can be deduced from the safety instructions of Deliveroo either, as they are general instructions and no case-related instructions.
- The deliverer is not obliged to perform the work personally and he may be replaced. The fact that Deliveroo sets certain requirements for replacement does not change this, since these requirements do not relate to the person, but to the objective requirements for performing the work.
- Although Deliveroo does the administration for the deliverer and Deliveroo determines the rates, the deliverer is free to send his own invoices and can choose whether or not to accept the rates.
On the basis of these specific circumstances the court concluded that Sytze is self-employed and not an employee on the basis of an employment contract.
The importance of this ruling in practice.
The qualification of the working relationship of platform employees depends on the particular set of facts. In practice, it is important to draft the facts and intentions carefully and fully in the agreement and to act accordingly. That sounds easier than it actually is, of course, but the case law offers guidelines. In addition, the qualification of the employment relationship is also important from a fiscal point of view and for the levying of pension contributions. The Dutch Tax and Customs Administration (“Belastingdienst”) also has more tools, to impose an additional assessment: if no employment relationship exists, a fictitious employment relationship may still exist. As from 1 July 2018, the Tax and Customs Administration will also enforce this policy for clients who do not qualify as "malicious". Clients who wish to run no or less risk have various alternatives. Examples are the hiring of personnel via an employment agency or working on the basis of a (model) agreement approved by the Tax and Customs Administration.
Our Employment & Benefits team consists of both employment and tax lawyers and is therefore ideally suitable to assist you with these kind of complex labour and tax law issues. We gladly think along with you about these issues!
More information? Contact your regular Loyens & Loeff advisor or us, Jim Margry, Ralph Ferouge and Gerwin Hoeksma.
Follow our Showcase Page on LinkedIn for updates and more BenefitsBits: https://www.linkedin.com/company/benefitsbits
JimMargrySenior Associate Attorney at law
Jim Margry, attorney at law (senior associate), is a member of the Employment & Benefits Practice Group. He has all-round experience in employment law, with a particular focus on the employment law aspects of M&A-deals, restructurings and collective dismissals, co-determination procedures, cross-border labour and employee participation structures.T: +31 20 578 56 31 M: +31 6 22 09 52 11 E: email@example.com
GerwinHoeksmaAssociate Tax adviser
Gerwin Hoeksma, tax adviser, is a member of the practice group Payroll Taxes & Employment Law.T: +31 20 578 55 66 M: +31 6 55 78 56 12 E: firstname.lastname@example.org