It is the fourth court judgment in the UK to determine that Deliveroo riders are self-employed, following a judgment by the Central Arbitration Committee and two such judgments at the High Court.
The IWGB, which represents people working in the gig economy and for outsourcing contractors, has been fighting a case since 2017 to have Deliveroo drivers classified as ‘workers' with the right to engage in 'collective bargaining' for improved employee conditions.
However, the Court of Appeal found that past judgments were correct to reach the view that riders are not in an employment relationship with Deliveroo, with all three judges agreeing with the verdict.
Central to the decision is that the terms of their employment allow for 'substitution', which means riders can ask somebody else to carry out a delivery for them.
Giving the lead judgement, Lord Justice Underhill acknowledged that the Court of Appeal's decision 'at first might seem counterintuitive' given the benefit for riders of being able to organise collectively. But he said there was a distinction between the right to organise generally and the right to organise as a trade union, which enjoys specific legal protections.
A spokesperson for Deliveroo said: “[This] is good news for Deliveroo riders and marks an important milestone. UK courts have now tested and upheld the self-employed status of Deliveroo riders four times.
“Our message to riders is clear. We will continue to back your right to work the way you want and we will continue to listen to you and respond to the things that matter to you most.
“Deliveroo’s model offers the genuine flexibility that is only compatible with self-employment, providing riders with the work they tell us they value.
"Those campaigning to remove riders’ flexibility do not speak for the vast majority of riders and seek to impose a way of working that riders do not want. Deliveroo will continue to campaign for companies like ours to be able to offer the full flexibility of self employment along with greater benefits and more security.”
The London Stock Exchange responded positively to the outcome, with Deliveroo’s shares up 8.5% after the announcement.
Following the verdict, the IWGB said it had not yet made a decision on whether to take the case to the Supreme Court and was assessing its options.
Andy McDonald MP, Labour’s Shadow Employment Rights and Protections Secretary, described the ruling as 'devastating' for Deliveroo drivers.
He said: “Millions of people in the gig economy are in fragile and insecure work with one-sided flexibility, which is bad for those workers, bad for the economy, and, as we’ve seen from this pandemic, a disaster for public health.
“All working people should have full employment rights, protected by the law.
"This case underlines the urgent need for the Government to outlaw the exploitative employment practices used by Deliveroo and bring security to all workers, as well as the importance of organising in trade unions.”