A COO with a management agreement claims an employment contract. The questions is whether the COO is considered an employee or an entrepreneur.
Deliveroo Ruling
The judge assesses whether an employment relationship existed between the COO and one of the companies based on the criteria from the Deliveroo ruling:
Nature and duration of work: The COO was a co-founder and ultimately responsible. Working 40 hours per week is possible under a contract for services.
Specified duties and working hours: The COO was free to organize her working method and hours.
Embedding of work and the person performing the work in the organization and the business operations of the person for whom the work is performed: An insufficiently distinguishing criterion. The COO was ultimately responsible and her activities were core activities. This can point to both types of agreements.
Obligation to perform the work personally: Of course, the COO had to perform the work personally. She could have herself replaced, but this did not happen in practice.
The manner in which the contractual arrangement of the relationship between the parties came about: Starting as an entrepreneur was conscious and not imposed.
The manner in which the remuneration is determined and paid: The COO invoices a management fee plus VAT.
Amount of remuneration: Payment of the fee during pregnancy is not in itself an indication of an employment contract. The amount of the remuneration was part of her entrepreneurial risk (right to profit on sale).
The question of whether the person performing the work runs commercial risk: The COO invested her own money in the company and took out a loan: commercial risk.
The question of whether the person performing the work conducts or can conduct themselves in economic traffic as an entrepreneur: The COO was solely and independently authorized and acted internally and externally as an entrepreneur and founder of the company.
Conclusion
A contract for services!
A practical example of the test of the organizational embedding criterion. The extent to which an individual is integrated into the organization and contributes to core activities can influence the interpretation of the employment relationship, but is not decisive. This can provide leeway in determining and defining the employment relationship.
