A French court has given two former Deliveroo managers suspended one-year prison sentences for abusing the freelance status of the British food delivery company’s riders.
The managers were also fined €30,000 (£24,955) each. The London-headquartered company was handed a fine of €375,000 (£311,966) and was told to publish the court’s decision on the home page of Deliveroo France for one month.
The court deemed that the food delivery company has been violating French labour laws that grant workers certain rights, including benefits, social security, and pension contributions.
An investigation into Deliveroo’s practices found that the company was allocating extended time slots in which riders must be available to make deliveries. Those that refused the extra deliveries were told they could not continue working on the platform.
This was despite Deliveroo’s claims that its riders are “freelance partners”. Under French labour laws, freelancers have more autonomy over the hours they work than full-time employees.
The investigation also found that Deliveroo had an illegal level of control over the pay increase criteria and minimum hours requirement for freelance workers.
“This set of elements characterises a situation of almost permanent legal subordination,” said judge Sylvie Daunis.
Deliveroo has said it is appealing the court decision.
“The judgement goes against previous decisions in civil courts covering the same historic period, which have repeatedly found riders to be self-employed,” a spokesperson for Deliveroo said.
“While this case does not concern today’s operating model, we strongly disagree with this judgement and the basis on which it has been made, and we will appeal.”
This case comes just three weeks after Deliveroo CEO Will Shu was given a 16% pay increase, taking his salary up to £600,000 with an additional £5m of shares, as part of a £30m package over the next six years.
Latest blow for gig economy firms
Debates over the ethics and legality of companies operating with the gig economy model for employees have been ongoing since the rise of companies like Deliveroo and Uber.
Deliveroo has previously faced legal action over the status of its couriers, having won a court case in the UK last year following the Independent Workers Union of Great Britain’s (IWGB) attempts to represent riders in 2017.
The UK court deemed that Deliveroo riders did not meet the requirements to be classified as workers.
Uber faced similar legal action last year when the UK Supreme Court forced the ridesharing company to classify its drivers as employees instead of independent contractors.
Last year, Deliveroo listed on the London Stock Exchange and saw its share price immediately plunge by as much as 30%.