The Madrid High Court of Justice found that Glovo’s gig (contract) workers are not independent contractors but employees

April 1st, 2020
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The Madrid High Court of Justice found that riders (drivers) of Glovo – a Spanish on-demand courier service that purchases, collects and delivers products ordered by consumers through its mobile application system, which includes food deliveries – are not independent contractors but employees of the operator (see Tribunal Superior de Justicia de Madrid – Sección no 01 de lo Social- Recurso de Suplicación 588/2019). Looking at the reasoning, and whether this can be considered as guiding principles for South African courts in relation to our own contract workers, I do not see this as a risk inhibiting the sanctity of contract working conditions in South Africa. In fact, I think the finding of the court can and should be appealed.

On 19 September 2019, the court ruled that the riders (drivers in our context) were independent contractors with no employment relationship to Glovo. On 27 November 2019 and in a plenary session, the court ruled that Glovo riders are employees and not independent contractors. The factors informing this finding were as follows –

  • their invoices are drafted by Glovo, which revealed the riders’ lack of infrastructure to organise themselves with their own means;
  • their remuneration for each service is unilaterally fixed by Glovo – riders cannot negotiate it;
  • they are unable to decide the price that clients should pay for the service;
  • Glovo benefits from the result of the riders’ work;
  • the main means of production (the app) is owned by Glovo and without it riders cannot provide services as such. Mobile phones and bicycles, which are owned by the riders, are secondary means of production;
  • they must deliver products to clients following Glovo’s instructions within 60 minutes;
  • they are geo-located and thus their activity is controlled; and
  • they are subject to Glovo’s disciplinary power because, if they reject orders, the algorithm automatically excludes them from the most advantageous timeframes. Likewise, their contracts include termination clauses, which are in practice, disciplinary offences.

Can this equally be applied to the South African contract workers?

Where contract workers earn below the annual earning threshold of R 205 433,30, promulgated under the provisions of the Basic Conditions of Employment Act 75 of 1997 (BCEA), they can rely on the deeming presumptions of employment under s 200A of the Labour Relations Act 66 of 1995 (LRA), which largely mirrors the criteria of the Madrid High Court of Justice. Section 200A of the LRA states that, unless the contrary is proven and regardless of the form of the contract, a person is deemed to be an employee if any one of the following circumstances exist –

  • the manner in which the person works or their hours of work are subject to the direction or control of another person;
  • the person forms part of the organisation;
  • the person has worked for the other person for an average of at least 40 hours per month for the last three months;
  • the person is economically dependent on the other person;
  • the person is provided with tools of trade by the other person; and
  • the person only provides services to one person.

This deeming presumption of employment can only be invoked where the contract worker/alleged employee in question earns below the BCEA annual earning threshold. This means that contract workers seeking to claim protection under s 200A of the LRA would need to earn less than the annual earning threshold. Where they ‘earn’ in excess of this amount, they would need to rely on the Code of Good Practice.

A clarity question would be autonomy and agency of the contract worker/independent contract in availing their time because that would impact their ‘earning’ and thus being able to seek the protection of s 200A or the code as the case may be. This creates a preliminary hurdle to protect the gig economy.

How can any person who elects what quantity of time to place at the disposal of their platform now claim vulnerability and thus seek protection under the purview of s 200A of the LRA? The independence, autonomy and agency of the independent contractor cannot be undermined in this equation.

The criteria relied on by the Madrid High Court appears to assume that the Glovo riders lacked the capacity to contract and negotiate the terms of the contractual arrangements altogether. It is equally concerning that in an increasingly app based and platform serviced society, the underlying app is seen to be the mode of production lending to a presumption of employment.

In our space and to date our courts have respected the sanctity of the individual’s contractual capacity. That being said, I have often found guidance in international jurisprudence, which is why these findings and outcomes are of concern to a country in need of work and employment opportunities (as distinct opportunities). Should any contract worker seek protection under s 200A of the LRA or the code, looking at this judgment in its current form, it would need to be considered against precedent on these points.

Sherisa Rajah LLB (UKZN) Dip Pension Fund Law (Unisa) is a legal practitioner at Fasken in Johannesburg.

This article was first published in De Rebus in 2020 (April) DR 7.

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