Australia – Foodora delivery rider ruled as employee, wins landmark unfair dismissal case

Australia’s Fair Work Commission last week ruled a Foodora rider was an employee, not a contractor, upholding a case of unfair dismissal and ruling the company should pay the worker AUD 15,000 (USD 10,947) in compensation.

The decision could have a far-reaching impact for other gig economy companies in Australia such as Uber and Deliveroo, which like Foodora, also classify its drivers and riders as contractors and not employees.

Last week’s unfair dismissal case against Foodora was brought by rider Josh Klooger in March 2018 when after he complained about a lack of workers’ rights. In July, the Fair Work Commission kicked off an unfair dismissal hearing against Foodora. At the same time, Foodora was facing accusations from the Fair Work Ombudsman, Australia’s workplace watchdog, over sham employment practices.

In August, the company announced that it would cease operations in Australia. It was then reported that Foodora was being chased by The Australian Taxation Office and Revenue New South Wales (NSW) for unpaid superannuation, penalties and interest. Foodora also revealed that it had been unable to pay an AUD 28.3 million (USD 20.6 million) loan from its parent company, Germany-based Delivery Hero.

Meanwhile, The Guardian reports that other riders – many of whom sustained injuries on the job – are pursuing Foodora’s parent company, Delivery Hero, for AUD 8.5 million (USD 6.2 million) in unpaid wages and workers’ compensation. Foodora administrators admitted they probably owed the workers AUD 5 million (USD 3.6 million) because they had been incorrectly classified as independent contractors.

Last week, creditors voted to accept the company’s offer of paying AUD 3 million (USD 2.2 million) of the AUD 8.5 million (USD 6.2 million) it owes to riders and local tax authorities.

Foodora must now pay Klooger AUD 15,000 (USD 10,947) in compensation.

In its decision, the Fair Work Commission found Foodora terminated Mr Klooger’s contract in a ” plainly unjust, manifestly unreasonable, and unnecessarily harsh”, manner and without warning, for complaining over workers’ rights.

The Fair Work Commission also found that the control Foodora exercised over Klooger’s shift work including the place of work and start and finish times of shifts contributed to the relationship being one between an employee and employer.

Klooger, who was represented by the Transport Workers’ Union (TWU), told the Sydney Morning Herald, “Foodora were in control of my working and my employer. I wasn’t working for myself.”

The Fair Work Commission also looked at Foodora’s “batch system” that gives its best riders the pick of shifts while punishing the most “inactive” or “worst-performing” riders by making them wait two days before they can choose their shifts. ABC.net.au reported that this batch system was found to be evidence of Foodora having a ‘high-degree’ of control over its workers.

“This fight does not end here. We will continue to pursue Foodora for the money they still owe riders in Australia,” TWU national secretary Tony Sheldon said.

Labour senator Murray Watt, who chaired the Future of Work inquiry this year, told the Sydney Morning Herald, “It’s a landmark decision that will fundamentally reshape work in the gig economy and will reshape the rights of workers in that economy. Companies like Uber Eats and Deliveroo should be very worried by this decision.”

Source: http://www2.staffingindustry.com/row/Editorial/Daily-News/Australia-Foodora-delivery-rider-ruled-as-employee-wins-landmark-unfair-dismissal-case-48135