Deliveroo PLC (LSE:ROO) food couriers cannot be recognised as workers nor form unions after the Supreme Court ruled in favour of the delivery company.
Representing the riders' fight for collective bargaining rights were the UK-based IWGB union and the International Transport Worker’s Federation.
The IWGB, which has membership among riders for Deliveroo and other 'gig economy' workers, had fought the case in court since 2017, when the union argued that workers had the right to unionise under European Law.
Food delivery companies have battled hard to establish delivery drivers and bikers as self-employed, which has resulted in some verified couriers engaging in the process known as "substitution", where they are allowed to pick another person to cover some of their deliveries.
Because of this substitution process and the fact that workers can choose their own hours and work for several of the delivery apps, UK Supreme Court judge Lady Rose said in the decision that the contracts between riders and the company do not constitute an “employment relationship”.
Last month Deliveroo, Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) and Uber Eats were told by the government to tighten up their employment policies after it was found that an under-aged rider who died was carrying out a substitution job.
"The Supreme Court’s ruling comes as a disappointment after years spent fighting a legal battle to secure riders’ bare minimum employment rights," the IWGB said in a statement.
"As a union we cannot accept that thousands of riders should be working without key protections like the right to collective bargaining, and we will continue to make that case using all avenues available to us, including considering our options under international law."
The union said the flexibility of working for these apps, including substitution, "is no reason to strip workers of basic entitlements like fair pay and collective bargaining rights" and was a "dangerous false dichotomy between rights and flexibility".
Beth Leng, employment lawyer and partner at SA Law, said the decision went against the grain of a recent trend in cases, which have been towards affording those in the gig economy greater protection, but "focuses almost entirely" on the issue of substitution.
She noted that the court agreed with previous decisions that the power conferred on riders under the new contract to appoint a substitute was “virtually unfettered”, so wasn’t limited to other Deliveroo riders and applied both before and after delivery. The court concluded: “such a broad power” was “totally inconsistent” with the requirement for personal service.
"This will no doubt be a blow to campaigners in this area but once again, it underlines the importance of a detailed examination of how these gig economy contracts work in practice," Leng said.
Deliveroo shares were down 1.3% at 138.7p on Tuesday.