Deliveroo courier strike: Employers cannot 'simply opt out of the National Living Wage', says Government

'An individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed,' says the Department for Business, Energy and Industry Strategy

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The Independent Online

As Deliveroo courier drivers strike for the third day running over proposals that could see them earn barely half the National Living Wage, the Government appears to have waded into the dispute with criticism of the food delivery company.

Of the company's 3,000 cyclists and moped riders who deliver food parcels around London, 280 have been offered a trial which would reduce their hourly pay to as little as £3.75 during quieter periods - but with a pay guarantee should they receive less on the new payment model.

And now the Department for Business has responded to the proposal, which is set to begin on Wednesday, by saying workers "have a right" to the NLW. 

Any change to that basic rate of pay could not be "simply opted out of" but would need to go through a formal court process before being reduced, said the Government.

The stance would appear to add to the criticism leveled against Deliveroo from unions and the public about its treatment of its "independently contracted" staff.

A spokesperson for the Department of Business, Energy and Industry Strategy (BEIS) said signing a "type of contract" was not justification enough for not paying the NLW).

"The Government is determined to build an economy that works for all – that includes ensuring everyone gets a decent wage," said a statement from the BEIS.

"An individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed. Individuals cannot opt out of the rights they are owed, nor can an employer decide not to afford individuals those rights.

"Employers cannot simply opt out of the NLW by defining their staff as self-employed.”

Deliveroo workers will take the company to court, said the IWGB, if it imposes the new contract

Deliveroo drivers took to the streets of central London on Thursday in the first day of strikes which protest against changes to their pay and conditions.

An email sent around to all the workers with the company has told them they will be paid £3.75 per delivery instead of an hourly rate of £7 plus £1 per delivery for certain times of the day where deliveries are less popular. Couriers have pointed out that they are still waiting around in quiet periods should any jobs come through.

The hourly rate already sees many of them earn less than the NLW – currently set at £7.20 for those aged over 25 – once travel expenses are accounted for, and distinctly less than the London Living Wage of £9.40, couriers have said.

Deliveroo, which has raised $275m (£212m) from angel investors this month, has said it will enforce the pay terms from next week and claimed that couriers had responded positively in early trials.  But a union which sprang up in 2015 to represent independently contracted couriers such as at Deliveroo and Uber has said workers were in fact reacting positively to having the obligation to always work two weekend evenings removed.

Couriers had reportedly complained about being contractually obliged to always work weekend evenings, thereby allowing Deliveroo to say workers were happier with "piece rate" wages that were more flexible, said the Independent Workers Union of Great Britain (IWGB).

A striking Deliveroo worker protests against 'slavery' on their moped as the company seeks to impose a new contract

Margaret Dewhurst, chair of careers and logistics at IWGB, said the attempt to change a fixed hourly rate to a differing piece rate was intended to hold drivers at "arms length" from the company and ensure they still could not access basic workers' rights such as the NLW and holiday pay.

"This new contract will help them more easily exploit people," she told The Independent. In terms of actual work, a piece rate is more advantageous to a company, because it means you can divvy up all the work and not treat people as proper employees.

"They're basically saying that in quieter period the average amount of time drivers are working is 15 minutes in an hour. But you're still there to provide a service for the other 45 minutes. It's total bull***. It's very frustrating talking to the management at Deliveroo."

She added that senior staff within Deliveroo had defended the practice by saying its workers were all "entrepreneurs". IWGB has said the majority are students, poorer workers, migrants and people supporting families.

Deliveroo told The Independent: “This is not a wide-scale change and nothing is set in stone at this stage. The trial is taking place across five areas in London. The new payment model is based on payment per delivery, with riders receiving £3.75 per delivery. We have conducted similar trials in carefully selected areas that are busy enough to support this model and have seen riders earning as much as £15-18 per hour over a lunchtime.

“This model also gives riders more flexibility, which we know is important to our riders. In our rider surveys, 60 per cent said that flexibility was the most important feature of the job and 85 per cent told us they see Deliveroo as a way to earn supplementary income or do short-term flexible work.

“Listening to our riders is incredibly important to us. We’re calling everyone in the London trial to get their feedback and answer any questions they might have, and we’re hosting drop-in sessions at our London office. This was always built into the process from the beginning.

“We absolutely respect their right to disagree with us. There have been no negative repercussions for any rider that voices criticism or participates in a protest about this – and that will always be the case.”

The National Living Wage of £7.20 for everyone aged over 25 years old – hailed as the new minimum wage – was announced by then Chancellor George Osborne in April this year. Yet nearly 200 employers have been recently named and shamed for failing to pay that minimum wage to their workers.

Meanwhile, Deliveroo has picked up $275m of investment in a boost that makes the food delivery group one of Europe's best-funded start-ups.

Deliveroo workers said they will fight the contract in court if it goes ahead. The IWGB said court tribunals against City Sprint, Addison Lee, E-Courier and Excel are also being considered by workers over allegedly similar practices.