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A Paris court on Tuesday handed the food delivery group Deliveroo a fine of 375,000 euros ($405,000) after finding it guilty of "undeclared labour" by using freelance delivery riders who should have been considered employees.
It was the latest move by courts to recognise the rights of "gig economy" workers who are often classified as independent contractors by start-ups and other firms, and thus ineligible for health insurance and other benefits.
The court ordered the maximum fine sought by prosecutors and also handed suspended one-year prison sentences to two former French executives at the Britain-based Deliveroo.
A third executive got a suspended four-month sentence and a 10,000 euro fine for complicity in the system, and Deliveroo was ordered to pay 50,000 euros each in damages to five labour unions who joined the case as plaintiffs.
State prosecutor Celine Ducournau also sought in vain to question Deliveroo's American founder and CEO Will Shu over a "fraud" that gave "all the benefits to the employer... without any of the inconveniences."
Over 100 Deliveroo riders were plaintiffs in the case prosecutors opened in 2015 but which got fresh impetus in 2020, when France's URSSAF agency in charge of employer social security collections demanded millions of euros in back payments.
Several riders told the court they had sought jobs that offered "flexibility" in terms of scheduling, only to find intense pressure to work at peak meal times, strict oversight of their routes and days off, and penalties if orders weren't delivered fast enough.
Deliveroo France had already been convicted of undeclared labour in a civil case in February 2000, when a labour court sided with a rider seeking to be recognised as an employee and not a contractor.
URSSAF is seeking to recover some 9.7 million euros from Deliveroo, and a court had already ordered in 2020 the seizure of three million euros in Deliveroo's account while the case was ongoing.
A Deliveroo spokesman said after the verdict that the company was "considering" an appeal.