Fair Work Commissioner Ian Cambridge has found Deliveroo rider Diego Franco was an employee with an entitlement to protection from unfair dismissal on the basis of a range of indicia including the company’s control, his branding, capacity to delegate, his entitlements and pay arrangements.

In his decision, Commissioner Cambridge said while the agreements’ written terms were important in determining employee/conttractor status, the contract arrangements were ” contracts of adhesion where the dominant party, Deliveroo, determined the terms unilaterally” – that is, the terms of supplier agreements were offered on a take-it-or-leave-it basis without the opportunity for the rider to negotiate mutually-agreeable terms.

Commissioner Cambridge found that while Franco did work for Deliveroo’s competitors which was permitted by its service terms, this did not prevent the existence of an employment relationship. He also found that while Franco was able to delegate work, it would not be possible in the context of the arrangement to pay the rider to whom the work was delegated a minimum wage.

In terms of the control test, the Commissioner found that “the data or metrics in the possession of a company such as Deliveroo, can be used as a means to control those who perform the work. As was the case in this instance, the control can be switched on and off as business needs and circumstances might have Deliveroo determine. Consequently, what might have, superficially, appeared to be an absence of control over when, where, or how long Mr Franco performed work for Deliveroo, actually camouflaged the significant capacity for control that Deliveroo, (like other digital platform companies) possesses.”

In relation to the dismissal for slow deliveries, Commissioner Cambridge found that while Franco was dismissed with a week’s notice for breaching his supplier agreement by failing to deliver orders in a reasonable time, Deliveroo never informed the rider about what delivery times it expected, meaning a failure to deliver on time “could not represent a reason that was sound, defensible or well-founded” and there was consequently “not a valid reason for the dismissal of Franco related to his capacity or conduct”. Commissioner Cambridge found that the termination of Franco’s services was unjust, unreasonable, and unnecessarily harsh.

TWU and Professionals Australia’s response

TWU national secretary Michael Kaine responded to the decision saying it “recognises that food delivery riders have rights” and puts Australia “in line with other countries across the world from the UK, to Spain and the Netherlands where the rights of gig economy workers have been recognised”. Professionals Australia joins with the TWU in urging the Federal Government to look at regulating the gig economy. CEO Jill McCabe said the union fully supports greater protections for gig economy workers. “We have long argued for a comprehensive regulatory response to provide certainty around the obligations of sharing platform managers and to ensure that persons engaged under disguised employment relationships have access to the protections they are due at the national level”, she said.

Deliveroo response

Deliveroo has said they plan to appeal the decision on the basis that riders are engaged as independent contractors who decide whether, when and where they work, how long to work, can reject any offer of work offered to them, can delegate their work and can work for others at the same time including competitors. This approach stands in marked contrast to the approach of app-based food delivery company Menulog who recently committed to moving to an employment-based model providing essential rights and protections for workers.

Link to decision: Diego Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818
(18 May 2021)