In what has become an increasingly complex and contested area of law, the Australian gig economy has faced a further set back in cementing a clear understanding of what the employment relationship is of gig economy workers.
In August 2022, the Fair Work Commission (FWC) Full Bench quashed a decision that a Deliveroo delivery rider was an employee and afforded protection under the unfair dismissal regime.
The rider as an employee
In Diego Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818, the FWC rejected Deliveroo’s argument that the delivery rider was an independent contractor, stating that while ‘camouflaged’, Deliveroo had a ‘significant capacity for control’ over the delivery rider and consequently should be considered an employee.
In that decision, the FWC found that despite the supplier agreement suggesting an independent contractor relationship, due to the terms of the agreement being determined unilaterally and the lack of bargaining power by the delivery driver, the agreement needed to be considered with a degree of caution.
That decision was significant, providing avenues for workplace rights for a group that had previously not enjoyed those benefits.
FWC Full Bench overturns the decision
The decision was overturned by the FWC in an appeal. In Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156, the FWC Full Bench determined that while at the time the FWC’s findings were correct, the original decision should be overturned based on the High Court decision in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1.
In the High Court decision, the court found that where parties have set out clear terms of their relationship in an employment contract which are ‘not challenged as a sham’, there is no reasons why the employment relationship would not be determined by the rights and obligations that are set out in the contract.
In the Deliveroo appeal, the FWC found that:
- there was no reason to suggest that the terms of the written agreement were a sham or unlawful; and
- the terms were not ‘indicative of an employment relationship’.
Therefore, the delivery rider must be considered an independent contractor due to the primacy of the contractual terms.
What can we expect now?
The decision is unlikely to be the last we see on the matter, with this recent appeal highlighting the ongoing uncertainty of laws and regulations in the gig economy surrounding the employment relationship of gig economy workers.
Going forward, organisations should ensure they continue to remain cautious of the way that they engage workers, the legality of their employment contracts and remain mindful of this rapidly evolving area of law.
How we can help
At Moores, our Workplace Relations team is well-equipped to guide employers through tricky situations in the workplace. Get in touch with the Workplace Relations team at Moores if you or your organisation would like some advice on navigating these evolving employment issues.
Contact us
Please contact us for more detailed and tailored help.
Subscribe to our email updates and receive our articles directly in your inbox.