The Oslo District Court recently considered whether bicycle couriers delivering food via the Wolt platform should be classified as employees or independent contractors. This case reflects a broader trend of increased judicial scrutiny regarding the distinction between independent contractors and employees.
The ruling provides important insights into how the boundary between employee and contractor is determined in practice, and outlines the obligations placed on employers utilizing flexible work models and platform technology.
This is the case
Three bicycle couriers had entered into assignment agreements with Wolt but asserted that they were, in reality, employees. Wolt maintained that the couriers operated as independent contractors.
The central issue for the court was whether the couriers qualified as employees under Section 1-8, first paragraph, of the Working Environment Act, or whether they were independent contractors. The classification carries significant implications, affecting rights such as permanent employment, overtime pay, holiday pay, and other employment-related benefits.
The District Court judges were divided; however, the majority concluded that the couriers were employees.
Key factors emphasized by the court;
The court conducted an overall assessment, giving particular weight to:
- Management and control: Although work was mediated through an app, Wolt exercised significant management and control over how the assignments were carried out.
- Imbalance of power: The couriers had no ability to negotiate pay or terms, and limited transparency regarding the calculation of their remuneration.
- Personal work obligation: Although, in theory, the couriers could use substitutes, this was deemed practically unrealistic.
- Need for protection: The couriers were financially dependent on Wolt and had limited opportunities to build expertise or strengthen their market position.
Ultimately, the court placed decisive emphasis on the couriers' real dependence on Wolt, their need for protection, and the control exercised over their work.
Consequences for employers
Following the ruling, Wolt was ordered to:
- Permanently employ the couriers based on the court-determined employment fraction.
- Pay overtime wages for login time exceeding normal working hours.
- Disburse holiday pay accrued previously.
- Enroll the couriers in the company’s occupational pension scheme, with retroactive effect from 2021.
- Pay compensation for breaches of the Working Environment Act.
- Cover compensation for work conducted on public holidays (May 1 and May 17).
The case clearly demonstrates that misclassification can result in significant financial consequences for businesses, including ongoing costs (salaries, pensions, holiday entitlements) and liabilities for back pay and damages.
Key takeaways for employees:
- Formal agreements are not decisive: Even if a "freelance" or "assignment" agreement is in place, the actual circumstances of the working relationship will determine the classification.
- Imbalance of power and need for protection matter: A lack of ability to negotiate terms weighs in favor of employee status.
- Dependency and control are critical factors: If the company exercises significant control and the worker is economically dependent, this supports a finding of employment.
Employers should:
- Review existing agreements: Assess whether current independent contractor agreements accurately reflect the nature of the relationship.
- Ensure proper classification going forward: Carefully evaluate management, control, and dependency when drafting new agreements.
It is also important to be aware of the presumption of employment under Section 1-8 of the Working Environment Act. As a starting point, individuals are presumed to be employees unless the employer can clearly demonstrate that they are independent contractors.
Conclusion
The Oslo District Court’s ruling highlights the importance of the protection element when assessing whether platform workers are employees or independent contractors. Although Wolt couriers had flexibility regarding their working hours, the real control exercised via the app, the unequal bargaining position, and the lack of influence over their own terms led the court to conclude that they were entitled to employee status.
The couriers’ vulnerable and dependent position underscored their need for the protection provided by the Working Environment Act.
It should be noted that the ruling is not final, and Wolt may appeal the decision to the Court of Appeal, which could impact the final legal position.
Need assistance with employment contracts and employment law issues?
At Magnus Legal, we assist employers with assessing employment relationships, reviewing contracts, and ensuring correct classification. Contact us if you would like assistance reviewing your agreements or ensuring that your business is compliant with applicable regulations.