Deliveroo has lost a test case in the Fair Work Commission which found delivery riders are employees and not independent contractors.
The ruling will have huge ramifications for the gig economy.
It means food delivery workers are entitled to the minimum wage and superannuation, in addition to protection from unfair dismissal.
Deliveroo loses test case
The test case involved an unfair dismissal claim by food delivery rider Diego Franco.
Deliveroo kicked Franco off its app in April last year after working for the company for three years.
The company accused him of taking too long to make deliveries.
It argued that, as a contractor, Franco did not have the right to file for unfair dismissal.
Independent contractors generally have more flexibility, however they are not entitled to make unfair dismissal claims.
They are also ineligible for the minimum wage and other entitlements, making them cheaper to employ.
The Fair Work Commission
Firstly, Commissioner Ian Cambridge found Deliveroo engaged Franco as an employee because he:
- booked his shifts through the Deliveroo app;
- wore the company’s uniform;
- didn’t build his own brand; and also
- didn’t have a distinct trade or profession.
Secondly, he found Deliveroo unfairly dismissed Franco.
“The substantive reason for the dismissal of Mr Franco was not sound, defensible, or well-founded.
“The procedure that Deliveroo adopted whereby it advised Mr Franco of the termination of his services by way of email communication and without any proper, prior warning, was unjust, unreasonable, and unnecessarily harsh.
“It was very regrettable that Deliveroo adopted a procedure whereby the decision to terminate the services of Mr Franco was taken without providing him any opportunity to be heard, provide explanation, offer any defence, or plead for mercy.”
Commissioner Cambridge ordered Deliveroo to re-instate Franco and pay him lost wages.
Deliveroo is facing the prospect of a wave of back-pay claims as a result of the decision.
Government must do more about exploitation
The Transport Workers Union backed Franco’s unfair dismissal claim.
National secretary Michael Kaine called on the federal government to do more about gig economy exploitation, following today’s Fair Work decision.
“This is an important judgement and puts Australia in-line with other countries across the world, from the UK, to Spain, and also the Netherlands, where the rights of gig economy workers have been recognised.
“This ruling has huge implications for gig workers in Australia and we urge the federal government to look at it today and start devising regulation now.
“We want the federal government to regulate in the right way and to put in place a tribunal with full powers to regulate gig workers’ rights and protections.”
It’s unlikely to happen at a federal level any time soon though, with last week’s budget including no new policies or funding for gig economy reform, and no mention of the sector at all.
Gig economy workers deserve protections
Industrial advocate Miles Heffernan from Fair Work Claims says gig economy workers deserve protection.
“Companies like Deliveroo clearly engage delivery riders as employees and should therefore pay them as such,” he said.
“To suggest they are independent contractors is laughable, however that has long been used as an excuse by these multi-million dollar companies to get out of paying proper wages and entitlements.
“Today’s Fair Work decision is welcome news – now it’s time for the federal government to, instead of stalling, start regulating to protect gig economy workers.”
The ruling follows a decision by rival food delivery company Menulog to make its workers employees.
It has recently asked the Fair Work Commission to create a new award, specifically for food delivery workers.
Please call our specialist team at Fair Work Claims today on
To connect with us, please follow us on
Fair Work Claims is part of the Supportah Network.
We are a private consultancy and advocacy firm with no affiliation to any government agency, commission or tribunal.