Deliveroo couriers are not self-employed

The Supreme Court ruled that Deliveroo delivery drivers were not self-employed but were effectively employed — a milestone in the fight against bogus self-employment. For clients, this serves as a warning: anyone employing freelancers who are treated as employees in practice risks back taxes, fines, and a claim based on an employment contract. Below, you can read what the ruling means and how to safely employ freelancers.

What did the Supreme Court decide in the Deliveroo case?

The FNV filed a long-running lawsuit against Deliveroo, and the Supreme Court ruled that the delivery drivers were not self-employed but effectively employed. The company had people working as freelancers, while in practice they were directed and had no say in the rates and conditions. That is bogus self-employment. Similar cases were also pending against other platforms, and earlier Helpling went bankrupt after the court ruled that the cleaners were effectively temporary agency workers.

Why is the freelance model attractive — and risky?

Hiring freelancers is attractive for companies: they do not have to hire employees, which is cheaper. In turn, freelancers enjoy the freedom to decide when they work, do not pay employee contributions, and often pay less tax.

The downside: many self-employed professionals are unable to build up a pension or are insufficiently insured. And because companies do not pay premiums (employee and national insurance schemes, pension contributions), society misses out on resources. That is a major reason why the government is tackling bogus self-employment.

The DBA Act and the risks for clients

The Deregulation of Assessment of Employment Relationships Act (DBA Act) aims to combat bogus self-employment. A ruling on bogus self-employment can have far-reaching consequences:

• the Tax and Customs Administration can impose additional tax assessments and fines;
• both the client and the self-employed professional can be held liable — the additional assessment and fine can therefore be imposed on both;
• The self-employed professional can claim an employment contract, with all the associated consequences (continued payment of wages, protection against dismissal, holiday pay).

TODO_VERIFY: the rules and enforcement policy regarding bogus self-employment (including the DBA Act, the enforcement moratorium, and new legislation) are constantly evolving — check the current status with the Tax and Customs Administration before relying on this.

How do you safely employ freelancers?

Whether a relationship qualifies as an employment relationship depends on the actual execution, not just on the contract. Limit your risk by:

• to ensure that the self-employed professional actually works independently (own rates, freedom of execution, no strict supervision);
• to prevent the self-employed person from effectively being treated as an employee;
• a good self-employment agreement or contract for services that aligns with practice.

You can read more about this in our blog about avoiding being classified as a bogus self-employed person.

Frequently Asked Questions

What does the Deliveroo ruling mean for my business?

It confirms that the actual working relationship is decisive. If you treat self-employed professionals as employees (direction, no say in rates), the relationship may be classified as an employment relationship.

Who is liable for additional tax assessments in cases of bogus self-employment?

Under the DBA Act, both the client and the self-employed professional can be held liable. The additional assessment and fine can be imposed on both.

Can a self-employed person enforce an employment contract?

Yes. In cases of bogus self-employment, the self-employed professional can claim an employment contract, with consequences such as continued payment of wages and protection against dismissal.

How do I avoid bogus self-employment?

Ensure that the self-employed professional actually works independently and is not treated as an employee, and use an appropriate agreement. Have your situation assessed if in doubt.

Hiring freelancers safely?

The rules surrounding bogus self-employment are complex and the risks are significant. Do not take unnecessary risks and seek advice on how to safely employ self-employed professionals.

Our employment law are happy to advise you. Schedule a no-obligation intake consultation.