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Recharacterization of the relationship between a delivery driver and a digital platform as an employment agreement : a real risk for professionals following the French Supreme Court decision of November 28, 2018?

December 21, 2018

In a judgment dated 28 November 2018, the French Supreme Court (Cour de Cassation) ruled for the first time on the characterization of the agreement between a delivery driver and a digital platform. The French Supreme Court granted the status of employee to a former delivery driver of Take Eat Easy (a company that went bankrupt in 2016). What impact will this case have ?

The question asked related to the recognition of a subordinate relationship between the driver and Take Eat Easy. The Supreme Court’s case law characterizes the subordination link based on objective elements. An employee is someone who performs work under the authority of an employer who has the power to give orders and directives, to control the performance of the work and to sanction failures by his subordinate. This characterization does not depend on the parties’ will, nor on the designation given to the agreement, but on how the professional activity is carried out in practice.

While the French Court of Appeal had rejected rechacterization because, among other things, the driver remained free each week to determine the time slots during which he wished to work, the French Supreme Court considered that the "geo-tracking system which enabled the company to monitor in real time the position of the driver and the number of kilometers covered by him" allowed the company to sanction the driver (via a bonus and malus system). It therefore ruled that the existence of a power of direction and control over how the driver provided his services created a relationship of subordination, and annulled the judgment of the French Court of Appeal.

For several years now, litigation related to digital platforms such as Uber has emerged both in France and abroad;  the decisions rendered by the courts however differ.

In France, several Uber drivers filed proceedings to recharacterize their Uber agreement as an employment agreement. On 29 January 2018, the French Labor Court dismissed a former Uber driver's request on the grounds that the driver was "entirely free to work according to the hours and days that suited him", and that "this total freedom in the organization" was "an obstacle to the recognition of an employment agreement". Nine drivers have since filed claims before the Paris Labor Court contesting their status of independent worker. The cases were pleaded on December 18th, 2018. The decision should be rendered next February.

In addition, the French social security authorities (“URSSAF”) filed proceedings before the French Social Security Court (Tass) in 2015 in order to recharacterize the relationships of Uber drivers as indefinite term employment agreements. It lost for procedural defect reasons; the Court did not rule on the subordination link claimed by the URSSAF.

In the United Kingdom, a British employment tribunal ordered Uber on 28 October 2016 to recognize its drivers as workers and consequently pay them at least the minimum wage, contribute to their pensions and grant them paid leave (decision subsequently confirmed on appeal by the UK Court of Appeal on 19 December 2018).). 

In the United States, Uber drivers filed a class action to recharacterize their agreement as employment agreements. Uber settled for $100 million to bring an end to the dispute.

It is still too early to assess the impact of this ruling: will claims and recharacterizations increase ? Certain digital platforms may decide to make changes in their organization to eliminate certain signs of subordination, which may be difficult in practice (notably as regards the elimination of geo-tracking). As a reminder, independent workers must be able to freely organize their activity and be autonomous. They cannot receive strict orders or directives and must preferably supply their own means to carry out the activity (car, helmet, protection equipment).  Note that the aim of claimants in this type of litigation is often to obtain the benefit of the social security regime or work accident regime and is not necessarily to obtain the status of employee, as often the driver wants flexibility at work, but this could change as a result of this new decision.

Moreover, the French « Avenir » bill offered platforms to voluntarily enter into a charter providing for a decent activity revenue, as well as measures to prevent accidents and give guarantees in the event of termination, in return for the non-characterization of a legal subordination link between the platform and the workers. This measure was censured by the French Constitutional Council but will be reintroduced in the “Mobilités” bill.

Stay tuned...