Big changes coming for delivery riders in the UK

Delivery riders and couriers could gain minimum wage and holiday pay under new government plans. The Department for Business, Innovation, Science and Trade launched a consultation on reforming employment status in the UK on Wednesday (14 October).

The department cited Resolution Foundation estimates that up to 900,000 people may currently be in bogus self-employment and missing out on core employment rights.

Bogus self-employment describes businesses labelling staff as self-employed when the reality of the working relationship makes them workers.

The department named parcel couriers, delivery drivers, hairdressers and gig economy workers among the people its plans could help.

The substitution clause

Courts currently apply a three-step test, and anyone who fails the personal service step cannot qualify as a worker.

Businesses can insert broad substitution clauses, which let individuals send someone else to do their work, to argue that those individuals do not provide personal service.

Employers have used these clauses even when they exercise substantial control over how the work gets done.

Deliveroo defeated the Independent Workers’ Union of Great Britain at the Supreme Court in 2023, with its riders’ right to substitute central to the ruling.

The government now proposes adding control to the second step of the test alongside personal service.

Under the change, a rider who could send a substitute but works under significant direction or control would move on to the final step rather than failing outright.

That final step asks whether the individual runs a business on their own account, with the company as a client or customer.

The department’s worked example featured a courier company that set pricing, tracked performance, and set collection times and delivery windows.

Its couriers supplied their own vans but had no independent customer base and had to use the company’s branding.

The government said the ability to set or negotiate pay is a key factor separating workers from the self-employed.

It warned that some courier companies push cost and risk onto low-paid drivers by making them buy vans, submit invoices and cover their own shifts.

A separate proposal would require companies to prove an individual is genuinely self-employed, rather than requiring the individual to prove they are a worker.

Limb (b) workers qualify for the National Minimum Wage, paid holiday and protection from unlawful wage deductions from day one.

“When loopholes are exploited, people are denied their basic employment rights and businesses doing the right thing are undercut,” said Jonathan Reynolds, Business Secretary.

“These proposals are about creating fairness that works for businesses and working people alike, while continuing to back the flexibility and independence that genuine self-employment offers,” Reynolds added.

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