The court considered Foodora’s senders first as entrepreneurs, then as employees – What is it about?

Food courier the position has been twisted for years, and there is still no final clarity on the matter. In short, it’s about whether the senders are independent entrepreneurs or employees on the payroll of platform companies.

In the current week, another court of law announced its opinion on the matter – twice.

On Monday, there was news about the insurance right about the decisionaccording to which Foodora’s two food couriers were not employees of the company.

On Tuesday, insurance law announced from another case. According to the law, the Foodoran courier was employed.

What are the seemingly contradictory decisions about?

Insurance right the key issue in the decisions was whether all the hallmarks of an employment contract in the Employment Contracts Act were fulfilled at the same time. It is a prerequisite for an employment contract.

In the employment contract, the employee undertakes to personally perform work on behalf of the employer, under the management and supervision of the employer, for a salary or other consideration.

In dealing with the right to insurance, the first of these conditions became central, i.e. whether the courier is personally committed to the work. In practice, the matter boiled down to whether the sender could have transferred the order he received to someone else without asking Foodora.

Second the key thing in understanding insurance law solutions is time.

The cases before the court took place in 2020 and 2021. However, the decisions were given in the opposite order: the decisions announced on Monday dealt with the cases of 2021, while the decision announced on Tuesday – in which the hallmarks of the employment contract were deemed to have been fulfilled – dealt with the case of 2020.

The time difference between the cases is key. It appears from the decisions of the insurance court that the food delivery service Foodora changed the contracts it made with couriers between cases.

As recently as 2020, Foodora had a courier contract in place, where using a substitute would have required prior agreement with the company.

In 2021, the transfer of the assignment to another person was found to be permitted in the contract. No conditions were set for using a substitute or subcontractor, the court states.

Thus, in the case of 2020, the insurance court considered that all terms of the employment contract had been met, but in the cases of 2021, this was no longer the case.

Employment law professor emeritus Seppo Koskinen The University of Turku is surprised that the insurance court did not consider the messengers as employees in the 2021 cases.

He considers the court’s decision to be valid, but more theoretical than practical in its starting points. He would rather have thought that the messengers were employed.

According to Koskinen, the personal condition should have been evaluated in such a way as to whether the work was, in practice, personally done.

There would have been no employee status if there had been evidence that the messenger had, for example, given long-term work to others, Koskinen thinks.

According to Koskinen, the solution that strengthens entrepreneurship has great practical significance for food delivery companies.

“All these companies will probably change their own contracts so that the requirement to perform the work personally is not met,” Koskinen estimates.

Based on the cases, it seems that the platform company can avoid the employer status by ensuring in the contract terms that the sender is not personally bound to do the work.

“This leads to the employee status being circumvented.”

A year In the decision regarding 2021 cases, the insurance court confirmed the entrepreneur status of the couriers with a voting decision of 12-2.

The member of the insurance court who disagreed left a statement in the decision, in which he considered it “somewhat obvious” that the option to use a substitute was added to the written contract template only and only for the purpose that the work of messengers would not meet the hallmarks of an employment contract. Another dissenting member of the court also agreed with this view.

The Insurance Court is an independent and impartial special court for income security matters that is part of the Finnish court system.

Foodorassa it can be seen that the option for the transmitter to use a subcontractor was already in the previous contract model, says the company’s operational director Lauri Syvänen.

In the new contract model related to the cases of 2021, the possibility has been “clarified”, he says.

Did you specifically plan these? [sopimukset] in such a way that you ensure that it does not [lähettejä] interpreted as an employee?

“No, this has been done because we want to support the rights of entrepreneurs. As I said, there was already such a possibility in the previous agreement. It was clearly too unclear for our referrals as well, and this was clarified so that they are more aware of their rights as an entrepreneur,” says Syvänen.

Food courier the labor law status has been discussed for a long time. Attempts have also been made to clarify the controversial question with new legislation.

In 2023, a confirmation was added to the Finnish Employment Contracts Act that, in situations subject to interpretation, the existence of an employment relationship would be assessed by a so-called overall consideration, which aims to take into account factors affecting the actual relationship of the parties.

However, the actual definition of the employment contract did not change.

The European Parliament again approved this spring of the Directive, according to which the relationship between the food sender and the platform company would be assumed to be an employment relationship, if circumstances indicating supervision and management are detected. The platform would have the obligation to show that it is not an employment relationship, so that the presumption could be rebutted. The directive has not been definitively adopted.

On the other hand it has also been controversial whether the platform companies use the so-called director right for the messengers, i.e. whether they lead and supervise the work of the messengers.

In the decisions published this week, the insurance court found that Foodora has given the dispatchers instructions on how the work should be done and in practice has determined with the application where and when the work should be done.

According to the law, Foodora practically monitors the senders’ work and its quality with the application. The payment of the fee is based on monitoring whether the services have been handled in an approved manner. According to the interpretation of insurance law, the criterion of being under the management and supervision of the employer was therefore met.

Foodora disagrees.

“In our opinion, we do not practice work management or supervision,” says Foodoran’s Lauri Syvänen.

According to him, as employees, the couriers would have to work in certain hours, for example according to precise instructions, while now the couriers can accept or reject the transports directed to them at their will.

A year At the beginning of 2024, Hämeenlinna administrative court pointed out that Wolt drivers are entrepreneurs. According to the administrative law, Wolt did not exercise management and control rights over the couriers.

At that time, the occupational health and safety authority announced that it intended to apply to the Supreme Administrative Court for leave to appeal.