Contractor agreement for a delivery driver

Self-employed delivery drivers are where employment status has been fought hardest in the last decade, and the agreement has to be written knowing that a tribunal will look at how the drivers work and not at what the document calls them. A driver who must accept the route they are given, drive the hours the depot sets and personally perform the work is a worker whatever the label; a driver who can decline routes, send a substitute and work for others is a contractor. The agreement reflects the second arrangement where that is the practice, and should not be used to disguise the first. I draft it, for the business or for the driver, for a fixed fee of £595, delivered in five working days. Status is checked case by case with HMRC's Check Employment Status for Tax tool, and no agreement can guarantee an individual's status.

Who this is for

Delivery businesses, courier companies and logistics operators in England and Wales engaging owner-drivers and multi-drop drivers on a self-employed basis, and drivers who want to understand what they are signing.

What matters in a delivery driver's agreement

The status question the courts have decided

A driver who undertakes to perform work personally for a business that is not their client or customer is a worker under section 230 of the Employment Rights Act 1996, with rights under the National Minimum Wage Act 1998 and the Working Time Regulations 1998, and the courts have found drivers to be workers where the business controls the work in practice regardless of contract wording; the agreement should therefore describe an arrangement that is in fact independent (the driver may decline routes, works for other businesses, bears the cost of their vehicle and the risk of a slow day) and the business should operate it that way, because a tribunal disregards terms that do not reflect reality.

Substitution, routes and control

A real right to send a substitute driver, with the business able to object only on reasonable grounds (licence, insurance, training) and the driver paying the substitute, is the clause most likely to distinguish a contractor from a worker, and it must be one the business would honour; the agreement should also say that the driver may decline a route when offered, is not required to attend the depot at set times beyond collection windows, decides the order of drops within the delivery windows the customer requires, and is not subject to the business's disciplinary procedures, with performance addressed by not offering further routes.

The vehicle, insurance and licensing

The driver provides and maintains their own vehicle, holds the driving licence the vehicle requires, and insures it for carriage of goods for hire and reward, which ordinary motor insurance does not cover and which section 143 of the Road Traffic Act 1988 requires for use on the road; the agreement should require goods in transit cover or say that the business's policy covers the goods, and should address vehicles above the weight at which the Goods Vehicles (Licensing of Operators) Act 1995 requires an operator's licence. Where the business supplies or leases the vehicle, the arrangement looks less independent, and the agreement should recognise that.

Pay per drop or per route and deductions

The agreement should state the rate per drop, per parcel or per route, what counts as a completed delivery, how failed deliveries and returns are paid, the invoicing and payment cycle with interest under the Late Payment of Commercial Debts (Interest) Act 1998, and any deductions the business may make; deductions for damaged or lost parcels and for fines should be limited to the driver's fault with evidence, because a scheme of deductions that leaves a driver below the minimum wage is strong evidence of worker status and a liability under the National Minimum Wage Act 1998 if the driver is one.

Goods, losses and the driver's liability

The agreement should set the driver's obligations for the goods (collection checks, proof of delivery, safe custody, returns), the business's claims process for loss or damage, the driver's liability capped at a stated sum per parcel or per route and excluded where the loss is not the driver's fault, and the position on parking and traffic penalties, which belong to the driver as the person in charge of the vehicle but should not be passed through where the business's delivery windows made them unavoidable.

Safety, hours and ending the engagement

The business owes duties under section 3 of the Health and Safety at Work etc. Act 1974 to drivers affected by its operation even where they are self-employed, and the agreement should require safe loading, manual handling practice under the Manual Handling Operations Regulations 1992 and route planning that does not require unsafe driving; drivers' hours rules apply to vehicles within the Transport Act 1968 regime. The agreement should run on short a right for either side to end on notice, with the driver's data held under the UK GDPR, and should not contain restrictions on working for competitors, which point to employment and are unenforceable against a contractor.

What it costs

Consultancy or contractor agreement, £595. Drafted for your business. Five working days.

Template set for repeat use, £895. One master agreement plus a short-form schedule you can reuse for every engagement. Five working days.

Buying online forms the engagement on payment. The scope is what the consultancy and contractor agreements page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A clear, express assignment of intellectual property to your business
• Confidentiality provisions that protect your business information
• Restrictive covenants drafted at a scope a court will uphold
• Clear treatment of status, so the arrangement is not accidentally something else
• Payment, deliverables and termination provisions that match how you work
• A reusable structure, so the next engagement costs you nothing

What is not included

• Employment status determinations and off-payroll working assessments, which need your accountant
• Tax advice
• Disputes with a contractor you have already engaged
• Immigration and right to work compliance

Questions I am often asked

Our drivers sign a self-employed agreement. Does that settle their status?

It does not. Status is decided on how the work operates, and tribunals disregard terms that do not reflect it. The agreement describes an independent arrangement; the business has to run one. Where it does not, the drivers are likely to be workers and the agreement will not change that.

Can we deduct the cost of lost parcels from a driver's pay?

For losses that are the driver's fault, with evidence, within a stated cap, and never below the minimum wage if the driver is in fact a worker. The agreement limits deductions to that, because an unlimited deduction scheme is where businesses lose status cases.

Does a driver need special insurance?

The driver does: carriage of goods for hire and reward is excluded from ordinary motor policies, and driving without the right cover is an offence. The agreement requires it and requires proof.

Related guidance and services

• Consultancy and contractor agreements, £595, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Contractor agreement for a courier

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.