The Administrative Court ruled: food couriers are entrepreneurs

The Hämeenlinna Administrative Court issued an important decision on 21.2.2024 concerning the application of the Working Time Act. The Regional Administrative Office for Southern Finland had obliged a Finnish food courier company to keep records of the hours worked by its delivery staff and the compensation paid for them. The courier company appealed against the Regional Administrative Court’s decision, arguing that the couriers did not have employment contracts with the company, but service contracts.

In its decision in favour of the company, the Administrative Court held that the work of couriers carrying out transport work did not meet the criteria of an employment relationship under the Employment Contracts Act in terms of the right to direct and supervise work. On the basis of the overall assessment, the work of the couriers could also not be regarded as being carried out in the context of an employment relationship. The Working Time Act therefore does not apply to the work of the couriers employed by the company.

According to the Employment Contracts Act, the characteristics of an employment relationship are a contract, the performance of work personally for the employer, the performance of work for remuneration and the performance of work under the direction and control of the employer. In ambiguous situations, the existence of an employment relationship is assessed on the basis of an overall assessment, taking into account the conditions under which the work is performed, the circumstances in which the work is performed, the intention of the parties as to the nature of the legal relationship and other factors affecting the de facto situation of the parties in the legal relationship.

The Administrative Court held that, in the relationship between the company and the couriers, the contractual element and the performance of the transport work for remuneration fulfilled the characteristics of an employment relationship. However, the Administrative Court considered that the company did not have the right to direct and supervise the couriers before the start of each individual transport order or between transport orders.

In assessing the absence of the right to direct and supervise, it was essential that;

• the couriers’ working time is not predetermined;
• the courier is not obliged to register on the company’s platform for the transmission of transport orders once they have signed a service contract;
• the courier is under no obligation to accept work once they have logged on to the platform;
• the courier has the possibility to withdraw from the accepted transport order at any time during the transport order;
• the courier can decide how the job is to be carried out, such as the choice of the transport orders on the digital platform and the duration of the job;
• the company’s control is limited to the technical nature of the work carried out by the courier and not to the quality of the final result of the work;
• the company does not actually supervise the courier’s individual transport work through the digital platform, even if technically possible; and
• the company only supervises the transport work to the extent that the order is completed, i.e. that the transported product is delivered to the customer and that the transport complies with the time limits required by food legislation.

In addition, the Administrative Court held that the company’s right to direct and supervise the work was not satisfied either by the fact that the company’s couriers had the possibility to obtain general advice on the transport work or by the fact that the transport work had to be carried out in accordance with the general instructions contained in the service contract.

In its overall assessment, the Administrative Court also considered that the service contracts concluded between the company and the couriers could not be classified as employment contracts on the basis of their wording and purpose, and that the factual circumstances did not support the conclusion that the relationship between the parties was of an employment nature. For example, the company does not restrict the activities of the couriers on behalf of other contractors, the couriers use their own equipment to carry out the transport work and the couriers are not reimbursed for the costs of using their own equipment.

“The decision was very important as it finally takes a stand on the employment law status of couriers. As the digitalisation of services increases and the traditional way of doing business changes, we will certainly continue to examine the characteristics of the employment relationship, with the recent decision of the Administrative Court serving as a precedent that provides guidance,” says Magnusson Finland’s Head of Employment, Anu Vuori.

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