First case in France for Deliveroo of re-qualification of a services agreement into an employment agreement

13 February 2020 Reed Smith Client Alerts

Home Perspectives First case in France for Deliveroo of re-qualification of a services agreement into an employment agreement

Under French law, an individual registered as self-employed with the relevant local authorities is deemed not to be an employee of their client according to the French employment code. However, they may still rebut this presumption provided that they are in a position to evidence the existence of a “link of subordination” that is defined by French courts as the power of the employer to instruct an individual, monitor their duties and inflict sanctions.

Authors: Séverine Martel

In the case at hand, a former Deliveroo delivery worker lodged a file against Deliveroo France before the Industrial Tribunal of Paris alleging that the services agreement they entered into with the company on 8 September 2015 and terminated on 6 April 2016 should be seen as an employment agreement. This was mainly because the worker’s activity was monitored by Deliveroo France on a permanent basis using GPS localisation, and the fact that the worker was subject to disciplinary sanctions.

Deliveroo France denied the existence of an employment agreement, indicating in particular that the delivery worker was free to have other professional activities and was not subject to any control from the Company in terms of working time and holidays.

The Company’s argument did not convince the Industrial Tribunal of Paris. On 4 February 2020, judges ruled that the services agreement entered into with Deliveroo France shall be seen as an employment agreement. Following the position taken by the French Supreme Court in 2018 (French Supreme Court, November 28, 2018 n° 17-20.079), in a case concerning another meal delivery platform (namely, Take Eat Easy), the Industrial Tribunal of Paris ruled that the link of subordination of individuals working with digital platforms is demonstrated by the existence of (1) an application having a GPS localisation system that allows real-time tracking of the individual as well as the distance the individual has covered and (2) the power of the digital platforms to inflict sanctions.

According to the Industrial Tribunal of Paris, these two criteria were met in the present case:

The delivery worker was obliged to download the Deliveroo application that has a GPS localisation system, and the worker disclosed messages from the Company’s instant messaging system suggesting that their activity was strictly monitored.
The power of Deliveroo France to inflict sanctions upon the delivery worker was evidenced by various facts (comments on the quality of the work performed, threats to terminate the services agreement, etc.).

With the delivery worker being considered an employee, Deliveroo France was thus ordered by the judges to pay termination indemnities as well as damages for unfair dismissal.

The judges went even further. They also judged that Deliveroo France was guilty of concealed employment, considering that the Company had deliberately circumvented the formalities associated with the hiring of employees, the payment of social security contributions and the remittance of payslips.

The delivery worker’s lawyer has already indicated to the French media that 50 more litigation cases against Deliveroo France should soon be brought before the Industrial Tribunals.

The Company has not indicated yet whether it is going to lodge an appeal but considering the conviction of concealed employment and the upcoming litigation cases, it is unlikely that Deliveroo France will stop the judicial fight now.

Deliveroo is the third digital platform to experience its freelance workers being recognised as employees.

Is there a risk that the business model of these digital platforms will collapse?

France has tried over recent years to offer a level of protection to freelancers working for these digital platforms. Since a new labour law came into force on 8 August 2016, digital platforms have been bound by a social responsibility towards self-employed individuals using their services as long as the digital platforms determine the main characteristics of the services offered (or the good sold) and the price. This social responsibility mainly consists of the payment by these companies of some contributions or expenses and the recognition of specific rights for the freelancers (the right to strike or to belong to a trade union, etc.).

A new law dated 24 December 2019, and which came into force on 27 December 2019 provides for additional measures of protection (better information on the modalities of the fees, the right to refuse to do a delivery or a transportation, the right to choose the work schedule, etc.).

The main measure of this law is the capacity for the digital platforms to implement a social responsibility chart that provides for, in particular, the modalities of the activity performed by the freelancers, the expected quality of service, the modalities of control of their activity and the circumstances that may lead to the termination of the services agreement. The original version of article L. 7342-9 of the French employment code created by this law provided that when a chart is approved by the French authorities, its implementation and compliance with its provision cannot evidence the link of subordination. This provision was designed to limit the number of requalification of services agreements entered into with digital platforms into employment agreements. This provision was, however, judged contrary to the French constitution by the French constitutional council. The most recent version only provides that the implementation of a chart approved by the French authorities cannot suffice to demonstrate a link of subordination. No doubt such a provision will not mitigate the risks associated with the use of freelancers.

In any event, the next few months may be quite important for the business model of the digital platforms; it is not only being challenged in France but also in other European countries.

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