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Foodora ordered to pay $15K to rider who exposed poor conditions

By Portner Press on November 21st, 2018
  1. Termination of Employment
  2. Unfair Dismissal

 

In a landmark unfair dismissal case last week, the Fair Work Commission (FWC) has ordered the multinational food delivery company Foodora to pay a former rider $15,559 in compensation.

After the ‘gig economy’ worker publically raised concerns about his and other workers’ low pay and working conditions, Foodora terminated his services under a clause in their service contract.

However, the FWC found that the delivery rider was not an independent contractor, but an employee.

It was noted in the hearing that:

  • The start and finish times and locations of shifts were fixed by Foodora
  • The service contract contained many provisions similar to an employment contract
  • Foodora had considerable capacity to control the manner in which the work was performed
  • The rider did not have a separate place of work, nor did he advertise his services elsewhere
  • The rider had to wear a Foodora uniform, and use equipment displaying Foodora livery

Foodora had also presented its riders as part of its business on their website in the following statements (emphasis added):

“We take great care to ensure excellent customer experience, be it from the user friendliness of our website and app. to quality [sic] of our packaging and the careful selection of our drivers.”

And

“Your food will be picked up directly from the restaurant by one of our couriers.”

While the FWC acknowledged that Foodora “would have understandably been aggrieved” by the ostensible “disloyalty of the [worker’s] conduct” which culminated in his appearance on the television programme ‘The Project’, they pointed out that “there is a fundamental level of protection provided to employees who raise complaint in respect to workplace rights and entitlements”.

“The dismissal of the applicant for substantive reason of his conduct involving complaint in respect to his and others’ workplace rights and entitlements does not represent a reason that could be found to have been sound, defensible or well-founded. Consequently, there was not a valid reason for the dismissal of the applicant related to his capacity or conduct.”

The Transport Workers Union of Australia (TWU) filed the application to the FWC on behalf of the dismissed worker.

TWU coordinator on the on-demand economy Tony Sheldon said “This ruling shatters the foundation that the on-demand economy is built on: that it is ok to rip workers off, steal their wages, refuse them retirement contributions and deny them wages when they are forced off the job because of an injury”.

Part of the TWU’s media release on its website states that the FWC “in its judgement stated that corporation [sic] are avoiding responsibility and obligations that it would have as an employer” including tax, public insurances, workers’ compensation, superannuation and workers’ health and safety – arrangements which the FWC declared “as a matter of public interest” that “should be subject to stringent scrutiny”.

The TWU statement also notes that creditors of Foodora’s parent company, Delivery Hero, have now voted to pay $3 million of the more than $8 million the company owes to its riders, from underpayment and denied superannuation.

This follows claims made by the TWU, ATO and Revenue NSW that were assessed when Foodora went into administration this August.

Mr Sheldon of TWU said “This fight does not end here. We will continue to pursue Foodora for the money they still owe riders in Australia. We will continue to demand an end to the exploitation of riders and other on-demand economy workers. The likes of Foodora, Uber and Deliveroo have introduced eighteenth century working conditions to our country, this time via an app. They are now on notice that this must change”.

Could you be participating in sham contracting, even unintentionally?

Make sure you aren’t. Read chapter I2 Independent Contractors and E1 Employment Contracts in the Employment Law Practical Handbook and take the correct steps now to protect your business.

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