No Employment contract based on Deliveroo criteria
The Supreme Court has clarified in the Deliveroo judgment that a holistic approach is necessary when determining the existence of an employment contract. This means that all relevant facts and circumstances must be taken into account. In a recent case, this assessment worked to the disadvantage of the individual who claimed to have an employment contract.
Case
Three management agreements were established, stipulating that two gentlemen and a lady would provide management services to a company through their personal holdings. The agreed-upon management fee varied for each individual. Together, they constituted the management team (MT), with the men occupying the roles of CEO and Customer Success Officer (CCSO), and the woman serving as Chief Commercial Officer (CCO), where she was ultimately responsible for the sales and marketing team.
At a certain point, both men posted a message on the company's intranet without consulting the female MT member, announcing her departure. Subsequently, a General Meeting of Shareholders (AGM) was convened, during which the woman was dismissed from her role as a statutory director. In response, the woman filed a claim with the subdistrict court, seeking a declaratory judgment confirming the existence of an employment contract and alleging that she was unfairly dismissed with immediate effect.
Deliveroo criteria
The subdistrict court considers various criteria to assess the nature of the relationship and concludes in this case that there is not an employment contract, but rather a contract for services.
Replaceability
Although she was required to perform the work personally, she could be replaced if necessary. However, this replacement did not occur. Additionally, she, along with the CEO and CCSO, was one of the founding members of the company and consistently presented herself as such both internally and externally. She sought advice on the management agreement from a tax consultant, invoiced her management fee through her holding company, and charged VAT. Moreover, she assumed commercial risk. As the general manager of the company, she had sole and independent authority and conducted herself as an entrepreneur and founder of the company in both internal and external interactions.
Conclusion
Based on the aforementioned points, the court concludes that there is no employment contract, but rather a contract for services. Consequently, the woman in question was rightfully dismissed as a statutory director by the AGM.