A French court has fined a pair of former Deliveroo executives for abusing the freelance status of the British food delivery platform’s workers.
As Reuters reported Tuesday (April 19), the execs received suspended one-year prison sentences and were fined €30,000 ($32,380), while Deliveroo itself was fined the maximum penalty of €375,000 ($405,000) and ordered to publish the ruling on its French home page for one month.
The report noted the decision could have an impact beyond France, as the gig economy faces more and more court challenges that could reshape working conditions.
Read more: EU Gig Workers Could Be Reclassified as Employees
Last year, the European Commission announced it was considering a proposal that would reclassify gig workers in Europe — including those at Deliveroo and companies like Uber Eats and Delivery Hero — as employees.
The proposal could also mandate that digital platform companies relinquish some control over workers to make them truly self-employed. If reclassified, these workers would be entitled to paid annual leave, collective bargaining and other benefits.
The European Union estimated this change could cost the industry as much as $5.1 billion and affect 4.1 million people.
Deliveroo issued a statement contesting the ruling and said it was weighing an appeal. The company said the decision referred to an earlier version of its operating model that had no bearing on how it now conducts businesses.
See also: Deliveroo Warns of Slower Growth as Pandemic Ebbs, Inflation Swells
“Our model has since evolved in order to be more in line with the expectations of our delivery partners, who want to remain independent … Deliveroo will continue to operate with a model that offers these independent providers a flexible and well-paid business,” the company said.
The Reuters report said former riders have sued Deliveroo, accusing the company of abusing their status as freelancers and arguing the company should have made them full employees. French law gives employees rights such as unemployment, social security and pension contributions.
The news comes less than week after Deliveroo warned of slowing profits amid a rise in inflation and fewer people ordering in as the pandemic ebbs.
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