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Deliveroo case delivers more uncertainty for the status of gig economy workers
In a decision that further muddies the waters regarding when a worker will be considered an employee for the purpose of accessing statutory entitlements and, in this case, the unfair dismissal régime, the FWC in the decision of Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818, has made a finding that a Deliveroo delivery rider is an employee.
The applicant, who was represented by the Transport Workers’ Union of Australia (TWU), is a Brazilian national who commenced performing services for Deliveroo Australia Pty Limited (Deliveroo) in around April 2017. During the course of his engagement he also performed work for the Uber Eats and Door Dash businesses.
The applicant used his own motorcycle to make the deliveries and logged in using an app on his smartphone, called the Deliveroo Rider App, to be offered a delivery based on his proximity to the relevant restaurant. The applicant could choose to accept or reject a delivery order up until the time an order was collected from a restaurant.
Relevantly, for a period during which the applicant made deliveries, Deliveroo used a booking system called SSB which required riders to book in advance to work in a particular food delivery zone at a particular time. Priority for bookings was given to riders based on performance factors such as attendance rates, cancelation rates and a rider’s willingness to work during periods of high demand.
The applicant executed supply agreements during the course of his engagement that said he was a supplier on his own account, not obliged to do work solely for Deliveroo and was free to work when and where he choose.
Applicant submissions
In submissions supporting an argument that he was an employee, and therefore eligible to make an unfair dismissal application, the applicant said the FWC should look at the totality of the relationship including whether the applicant was running his own business. In that regard it was noted that the applicant was not pursuing profits, had no ability to negotiate his remuneration or the terms of his engagement and wore Deliveroo branded paraphernalia.
It was emphasised that, in the circumstances, conventional analysis of what constitutes a principal/independent contractor arrangement was not helpful and that the use of technology such as the Deliveroo Rider App resulted in a manner of engagement that better resembled a casual (rather than independent contractor) relationship.
Respondent submissions
Deliveroo, on the other hand, pointed to the fact the applicant was not required to perform services personally (rather, he arranged for the performance of services), and he was able to work wherever, whenever and at whatever time he wanted, including for competitors (a practice known as ‘multi-apping’). The terms of the supply agreements and the fact the applicant invoiced Deliveroo and provided his own equipment were relied upon as evidence that the applicant had his own business.
It was emphasised by Deliveroo that riders could accept or reject offers at any time, and that the current app used to allocate work was essentially ‘blind’ to the personal characteristics of a rider (which meant work was not allocated based on any a rider’s performance or delivery history). That point was also one of a number of arguments advanced by Deliveroo in an attempt to distinguish the case from Klooger v Foodora Australia Pty Ltd [2018] FWC 6836 (in which Commissioner Cambridge found a Foodora delivery rider was an employee).
Findings
In considering whether the applicant was an employee, Commissioner Cambridge adopted the multi-factorial approach which involves consideration of different indicia, with no one factor being determinative, as well as a critical analysis of the overall nature of the relationship.
One of the more significant indicia relates to control. Commissioner Cambridge considered it particularly relevant that the SSB system used by Deliveroo had the capacity to retain and use the vast amount of data in its possession relating to rider performance to control when, where and for how long they performed work. It was also relevant that Deliveroo had the capacity under its supplier agreement to discipline riders, which he said also pointed towards an element of control.
The Commissioner acknowledged that although multi-apping may, on the face of it, point against the existence of an employment relationship, traditional arrangements for the performance of work have changed and it is now possible for an employee to work for two or more employers at the same time. In this case, therefore, the fact the applicant could work for competitors did not militate against a finding that there was an employment relationship.
Issues such as the inequality of bargaining power between the applicant and Deliveroo in negotiating the supply agreement, the fact the applicant was not applying a distinct trade and the applicant’s presentation as part of the business were also factors relied upon by the Commissioner in reaching a conclusion that the relationship between the applicant and Deliveroo was one of employment.
Having found the applicant worked for Deliveroo as an employee, the Commissioner then turned his attention to whether his dismissal was harsh, unjust or unreasonable. The reason for the dismissal (failing to deliver orders in a reasonable time in breach of the supplier agreement) was found to be not valid in circumstances where the applicant was not informed of the delivery times that were expected, nor that a failure to meet those delivery times would result in his dismissal.
Orders for reinstatement, continuity of service, and the restoration of lost pay were made.
The findings of Commissioner Cambridge in this case come at a point where the working conditions of food delivery riders is facing increased scrutiny. It also comes on the back of an announcement by food delivery service Menulog that it will make its food delivery riders employees, and apply to the FWC for a new modern award for food delivery riders.