5 December 2023

Deliveroo to apply mandatory collective bargaining agreement and pay pension contributions

Stefan Sagel

The Dutch Supreme Court recently delivered two significant rulings on the employment law obligations of Deliveroo. These rulings follow the 24 March 2023 judgment, where it ruled that Deliveroo riders qualify as employees under Dutch law.

In the current cases, the Supreme Court upheld the rulings by the Amsterdam Court of Appeal that Deliveroo falls within the scope of both the collective bargaining agreement for professional road haulage (CLA) – which has been declared universally binding – and the ministerial decree on mandatory participation in the industry pension fund for professional road haulage (Decree). As a consequence, Deliveroo must comply with the CLA and pay contributions to the pension fund.

First episode: Deliveroo riders qualify as employees

Starting in 2015, Deliveroo operated a digital platform in the Netherlands where an ordering and payment system linked independent restaurants and consumers. Deliveroo riders delivered meals to customers via an app on their phone to receive the orders and locations of restaurants and customers. In the first groundbreaking case initiated by FNV, the largest Dutch trade union argued that Deliveroo riders in the Netherlands are employees whereas Deliveroo had treated riders as self-employed workers since 2018. After the Advocate General at the Supreme Court issued an advisory opinion stating that Deliveroo riders qualify as employees (see our article), Deliveroo stopped all activity in the Netherlands in November 2022. Subsequently, the Supreme Court ruled in March 2023 that Deliveroo riders are indeed employees (see our article, and the ruling - Dutch only).

It is worth mentioning that this outcome is in contrast to a UK Supreme Court decision from 21 November 2023 which determined that Deliveroo riders in the UK do not qualify as employees under UK law (see the blog our Best Friend Network colleague Clare Fletcher wrote about this case). UK law, however, significantly differs from Dutch law.

Sequel to Deliveroo saga: CLA and Decree

In the current proceedings, FNV and the pension fund concerned (Stichting Bedrijfstakpensioenfonds voor het Beroepsvervoer over de Weg) argued that Deliveroo fell within the scope of the CLA and the Decree respectively. The CLA and the Decree have almost identical scope provisions, applying when the employer's activity predominantly concerns "the paid transportation of goods by road".

In both the CLA and the pension cases, the Amsterdam Court of Appeal – like the Amsterdam District Court – ruled in favour of FNV and the pension fund. The Court of Appeal felt that Deliveroo's core activity is delivering and, therefore, transporting meals and that this qualifies as "the paid transportation of goods by road". According to the Court of Appeal, the mode of transportation – whether by car, scooter, or bicycle – does not affect the scope provision's applicability. The fact that bicycle couriers are a relatively new phenomenon did not change this finding.

In its appeals to the Supreme Court, Deliveroo challenged the Court of Appeal's rulings that Deliveroo fell within the scope of the CLA and the Decree. Deliveroo further argued that the CLA and the Decree were invalid, due to conflict with the representativeness requirement. Based on this requirement, a CLA can only be declared universally binding and the Ministry can only decree mandatory participation in a certain pension fund if the social partners requesting this represent an "important majority" in the entire industry. According to Deliveroo, the representativeness requirement would not have been met if Deliveroo had been taken into account, as Deliveroo is not a member of an employers association. Deliveroo finally argued that applying the Decree to Deliveroo violated EU rules on free movement of services.

Supreme Court's rulings

On 24 November 2023, and in line with the opinions of the Advocate General, the Supreme Court held that Deliveroo's Supreme Court appeal arguments, in both cases, are without merit.

In the pension case, the Supreme Court first discussed what is known in the Netherlands as the collective bargaining agreement standard (in Dutch: cao-norm). According to established case law of the Supreme Court, the interpretation of collective bargaining agreements and mandatory industry pension funds is guided by this standard. The standard calls for an objective interpretation, primarily relying on the wording of the provisions in the collective bargaining agreement, read in the context of the entire agreement. Based on the standard, consideration can also be given to the implausibility of legal consequences resulting from different possible interpretation of the text. The intention of the parties can only be considered if, according to objective standards, this intention is evident from the text of the collective bargaining agreement (or decree on mandatory participation) and any associated written explanation.

Applying the standard, the Supreme Court confirmed that Deliveroo is required to participate in the industry-wide pension fund for road transport of goods and to pay pension contributions for its riders. The Supreme Court dismissed Deliveroo's argument that the Decree only applies to motorised professional transport and held that bicycle delivery falls within the scope of the rules too, according to a language-based interpretation. The Supreme Court also rejected Deliveroo's argument that the Decree was invalid: a ministerial decree on mandatory participation remains valid if it later turns out that the representativeness requirement would not have been met if an employer had been taken into account where it had not been previously. Regarding Deliveroo's arguments that applying the Decree to Deliveroo violated EU rules on free movement of services, the Supreme Court found that Deliveroo had not substantiated these arguments sufficiently, and that these did not outweigh the public interest of ensuring adequate social security for workers in the transport sector.

In the Supreme Court's second ruling on whether Deliveroo fell within the scope of the CLA, Deliveroo raised similar grounds of appeal it had raised in the pension case. The Supreme Court dismissed Deliveroo's grounds of appeal without explaining why, setting out that this is not necessary to ensure cohesion or development of the law, probably because its reasoning already follows from the pension case.

These rulings by the Supreme Court mark the final chapter of a lengthy legal dispute between Deliveroo, FNV and the pension fund. Now that the Supreme Court has held that Deliveroo riders are employees, Deliveroo will have to apply the CLA and pay pension contributions.

Stefan Sagel and Irina Timp of De Brauw's employment team litigated the CLA case before the Supreme Court on behalf of FNV.