High hopes were placed on the class-action lawsuit filed six years ago against delivery company Wolt, which sought to have its couriers recognized as employees. The settlement submitted to the court had been expected for many months, but nevertheless feels like something of an anticlimax to the expectations that accompanied the proceedings when they began.
The settlement does contain significant achievements—foremost among them the company’s commitment to compensating couriers at the minimum wage, providing them with insurance coverage, offering safety training, incentivizing pension contributions, and introducing a form of requirement to hold a hearing before terminating a courier’s engagement.
The total economic compensation of 34.3 million shekel is higher than the 24 million shekels originally claimed, and its main value is likely to lie in its deterrent effect on other platform companies, which are expected to align their terms of engagement with their couriers with the framework established by the settlement agreement. However, when divided among approximately 82,000 eligible recipients, it amounts to a relatively small sum, effectively legitimizing both retroactively and going forward the problematic employment model of Wolt couriers.
Couriers Remain Outside Most Protective Labor Laws
The central problem with this settlement model is that it does not recognize an employer-employee relationship between Wolt and its couriers, thereby leaving them outside most protective labor laws, in a gray area of limited rights with even weaker enforcement. Wolt couriers will not be entitled to paid vacation, sick leave, or recuperation pay; severance pay; unemployment insurance; or enhanced protection of their wages against late payment. Wolt’s contribution toward couriers’ pension savings is also significantly lower than the mandatory pension contributions that employers are required to make for salaried employees.
In the long term, it is not clear that providing Wolt couriers with full employment rights would not have cost the company more than the compensation agreed upon as part of the settlement. These are rights that labor courts have made clear “cannot be contracted out of” and that an employee cannot “waive.” Over the years, labor courts have developed tests for determining whether a worker is an employee or self-employed, and have ruled that these tests apply regardless of the nature of the agreement signed between the parties.
Yet in this case, the judges sent the parties to reach a settlement precisely on the issues that they had previously ruled could not be waived.
The State Cannot Be Relieved of Responsibility for the Situation
No less serious is the fact that the settlement leaves couriers without the right to organize in a trade union—the very right whose absence initially pushed them into a situation in which their rights are being decided through a class-action lawsuit led by a single courier and attorneys who have built-in incentives to reach a settlement, even at the expense of the rights of the class members.
And ultimately, the state cannot be absolved of responsibility for the situation. The State of Israel has apparently decided that it wants to create a “backyard” of workers stripped of rights in the labor market. This was a decision it made in 2022, when a team led by the Commissioner of Labor Relations at the Ministry of Labor, established to formulate regulatory recommendations on protecting platform workers, chose not to present any recommendations at all. The state also made this choice when it decided not to take part in the vote on the convention on the rights of platform workers at the International Labour Organization last June.