Deliveroo will drop a controversial clause in its employment contracts with couriers which prevents them from taking the company to an employment tribunal.
The clause stops Deliveroo couriers from contesting their status as self-employed workers, but has previously been described as “unenforceable” by legal experts.
Deliveroo managing director Dan Warne told MPs that the company needed to “revise the contract,” during a parliamentary select committee hearing about the gig economy on Wednesday.
The clause, as read aloud by Conservative MP Heidi Allen, reads: “You further warrant that neither you, nor anyone acting on your behalf, will present any claim in an employment tribunal or any civil court in which it is contended you are either an employee or a worker.”
Labour MP Frank Field added: “You actually forbid that before you give them work.”
Warne replied: “Do we need to make some revisions in those contracts? Yes. Will those revisions be made in the next couple of weeks? Certainly yes. This is not something that’s enforced, so there’s no need to have it in there.”
Warne initially tried to dodge questions about the clause, repeatedly claiming that couriers were “in practice” allowed to contest their status as self-employed workers.
He said: “In practice, if they wished to contest their status, they could do so and we wouldn’t challenge them on that.”
Eventually he said Deliveroo was a “comparatively young business” and that it “evolved contracts with our greater understanding of employment law” over time.
Warne appeared alongside representatives from Uber, Hermes, and Amazon, to discuss whether their employees deserve additional rights such as pensions auto-enrolment, holiday, and sick pay.
Deliveroo, Warne said, was in the process of setting up a pension scheme through Perkbox, a third-party employee benefits scheme. It’s likely Deliveroo will be working with a third-party pensions provider (Uber has similarly just partnered with Moneyfarm) to offer pensions and financial products to drivers. Warne said Deliveroo would contribute to workers’ pension schemes, provided it didn’t “compromise the status” of its riders.
Warne also revealed some interesting stats on Deliveroo riders:
- There are around 15,000 Deliveroo couriers
- 85% have another job alongside their Deliveroo work
- 60% of the fleet is younger than 25
- Riders earn an average of £9.50 an hour
- 80% of Deliveroo’s fleet are cyclists rather than on motorbikes