18.5.2021 – A Fair Work Commission ruling that a Deliveroo rider is an employee of the company rather than an independent contractor has added to uncertainty over the rights of gig economy workers in Australia, as it contradicts a full bench decision that Uber Eats drivers are not employees – see related TT articles that UK courts have held the opposite, (whilst holding that UberEats riders were employees), that UberEats paid a massive settlement, to a driver; and the High Court Rossato case, which will likely affect these ‘gig’ economy cases.
See below for further detail.
AFR – Hannah Wootton, Reporter – 18 May 2021
A Fair Work Commission ruling that a Deliveroo rider is an employee of the company rather than an independent contractor has added to uncertainty over the rights of gig economy workers in Australia, as it contradicts a full bench decision that Uber Eats drivers are not employees.
Commissioner Ian Cambridge found on Tuesday that Deliveroo rider Diego Franco was unfairly dismissed – a protection only extended to employees – from the company last year, ordering he be reinstated and repaid lost earnings.
Deliveroo’s plans to appeal the decision, which Mr Franco brought with backing from the Transport Workers Union, to a full bench has exposed divisions within the Commission over the vexed definition of “employee” in the gig economy.
Other delivery and ride-share apps that adopt a similar business model will also be watching keenly. Uber and Ola both classify their workers as independent contractors who are thus not entitled to employment rights such as a minimum wage, superannuation or sick leave.
Uber Eats has already distanced itself from Tuesday’s decision, saying that “not all online food delivery apps operate in the same way” and noting differences between its management and Deliveroo’s, such as the use of uniforms.
The delivery giant settled a similar case last year after three Federal Court judges tore into its arguments at trial, while rival Foodora left the Australian market in 2018 amid another test case about workers’ rights.
The ruling also comes as food delivery providers face increased pressure to provide better workplace protections to their riders after five were killed on the roads in a two-month period last year.
Commissioner Cambridge said analysis of “all the relevant indicia” showed a “complete picture” of an employment relationship between Deliveroo and Mr Franco.
These factors included that Mr Franco did not need “a high degree of skill or training” to do the job, have “substantial investment in the capital equipment used to perform his delivery work” or build up his own brand, and that he wore Deliveroo-branded clothing and relied on its systems to book work.
He also dismissed key points put forward by Deliveroo – and gig economy businesses generally – in favour of an “independent contractor relationship”.
He shot down claims that riders’ ability to delegate their work to others meant they were running their own businesses, saying that shift swaps were common among employees and there were “clear financial constraints upon any subcontracting” by workers.
He also said that while the fact riders were allowed to work for multiple delivery providers at once would have historically meant they were not employees of any one provider, it did not apply “in the context of the modern, rapidly changing workplace”.
Finally, he said Deliveroo’s control over what work Mr Franco received through the app and its ability to track his performance – such as average delivery times – and bar him from working based on that data showed they had controlled his work hours.
“What might have, superficially, appeared to be an absence of control … actually camouflaged the significant capacity for control that Deliveroo possesses,” Commissioner Cambridge said.
“True it was that Mr Franco was not under any obligation to actually perform work for Deliveroo, but Deliveroo could exercise significant control over when, where and for how long Mr Franco worked if it chose to do so.”
A Deliveroo spokeswoman said the company rejected “the premise upon which the decision was taken” and that she did “not believe this reflects how Deliveroo riders work with the company in practice”.
She said riders had “absolute freedom” to decide their work hours and which platforms they work for, and the company “will appeal this decision to protect those freedoms”.
Commissioner Cambridge’s ruling echoes a recent landmark British Supreme Court judgment that found Uber drivers were entitled to minimum pay, offering similar reasons for finding an employment relationship for the gig economy workers.
While the TWU drew the Commissioner’s attention to the judgment at the time, he said it had “not deflected consideration from adoption of the relevant principles that underpin the task of applying” Australian law to the case.
The Australian Centre for Corporate Responsibility on Tuesday called on Deliveroo to provide certainty for both its riders and investors by adopting an employee model, saying the ruling was “another nail in the coffin for [its] business model”.
“The recent Deliveroo IPO showed that workforce models are financially material. [Tuesday’s] decision raises the prospect of further regulation, and calls into question the profitability of Deliveroo’s current business model,” ACCR Director of Workers’ Rights Katie Hepworth said.