Gig economy: Madrid High Court of Justice unifies criteria and declares Glovo riders are employees

On 27 November 2019 the Madrid High Court of Justice ruled that riders for Glovo (a competitor of Deliveroo with a similar business model) are employees and are thus not self-employed.

Significantly, the court has changed its previous criteria after ruling on 19 September 2019 that Glovo riders were self-employed and had no employment relationship with the company.

Against this backdrop, the 27 November 2019 decision was taken in a plenary session, for the sake of legal certainty, and aimed to provide unified criteria for the Madrid High Court of Justice on the nature of relationships in the gig economy.

The Madrid High Court of Justice stated that Glovo riders are employees because:

• their invoices are drafted by Glovo, which reveals 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 geolocated 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.

This decision contributes to the existing case law on gig economy business models. Although the circumstances of each case must be individually analysed and the decision is not binding on other employment courts, this judgment will likely be considered as a relevant precedent in Spain on the gig economy.

As other courts have ruled in similar cases that riders who operate in the gig economy have no employment relationship with their company, this judgment will likely be appealed before the Supreme Court in an attempt to unify the case law on the nature of such relationships.

For further information on this topic please contact César Navarro at CMS Albiñana & Suarez de Lezo by telephone (+34 91 451 9300) or email (cesar.navarro@cms-asl.com). The CMS Albiñana & Suarez de Lezo website can be accessed at www.cms.law.