Status of Deliveroo Employees and the Gig Economy
Last week’s Fair Work Commission decision that a Deliveroo rider is an employee rather than an independent contractor, has added to the uncertainty of the correct classification of works engaged within Australia’s gig economy, as it contradicts a previous Full Bench decision that UberEats drivers are not employees for the purposes of the Fair Work Act 2009 (Cth).
In handing down his findings, Commissioner Ian Cambridge found that an employment relationship existed between Diego Franco and Deliveroo thus exposing Deliveroo for a claim for unfair dismissal – a protection only extended to employees.
Ultimately, Deliveroo was ordered by Commissioner Cambridge to reinstate Mr Franko and to compensate Mr Franko for wages lost or likely to have been lost since his dismissal in April 2020.
But how was the relationship defined as one of employee and not independent contractor in this particular case?
Commissioner Cambridge analysed the employment relationship and found that there were many elements that pointed to the relationship being one of employer and employee. Some of these factors included that:
- Mr Franco was provided a uniform;
- Deliveroo has a rostering system that also measured performance;
- Mr Franco’s role did not require a high degree of skill and training;
- Mr Franco was not required to make substantial investment in equipment in order to enable him to perform his role; and
- Mr Franco was unable to build his own brand or have substantial control over the terms of his engagement with Deliveroo.
While this decision has created uncertainty within the gig economy, this case highlights that Courts and Tribunals will focus on the amount of control exerted by the company over the individual. In this case, it was a key consideration in the decision that Deliveroo workers have less autonomy then those of independent contractors in that Deliveroo delegates work, particularly when the work is to be performed and who that work is to be given to.
Although Deliveroo has indicated its decision to appeal Commission Cambridge’s decision, it is becoming apparent that Australia’s gig economy landscape is slowly beginning to transition from a system of engaging workers as independent contractors and to that of employees. This can be seen in the recent decision by Menulog to commence trialing an employment model that provides minimum wages and entitlements.
If this article has raised any concerns for you or your organisation please do not hesitate to contact either John Hayward or Kate Smith on (07) 4046 1124, for advice specific to your circumstances or visit wgc.com.au .
This article was prepared with the assistance of Ruby Hedrick, law graduate.