The Fair Work Commission has ruled that a sacked Foodora worker was unfairly dismissed and should have been classified as a worker, in another “major blow” to the gig economy in Australia.
The Transport Workers Union, which brought the case to the FWC, now says that regulation of the gig economy is “inevitable”, and governments need to act.
On Friday afternoon the FWC handed down its decision on the unfair dismissal case against Foodora – which entered voluntary administration in Australia in August with a long list of creditors – on behalf of former Foodora rider Josh Klooger.
As part of the decision, the FWC ruled that Mr Klooger was an employee of the gig economy giant, rather than an independent contractor, in a verdict that could have major ramifications for other tech giants like Uber and Deliveroo.
“It’s really part of the tidal wave of rights that are coming to the gig economy. It says to government regulators that they have to get off their backsides and start protecting people working in Australia,” the TWU’s Tony Sheldon told InnovationAus.com.
“We’ve got a horrendous recipe of unethical behaviour that these big companies are operating under to feed their billion-dollar operations,” he said.
“These new apps ethically can’t hide behind antiquated laws, and new laws are inevitable because of the degree to which exploitation is going on by these gig tsars, backed by conservative politicians.”
The verdict comes just days after administrators for Foodora also came to this same decision, as the ground beneath the gig economy begins to shift.
The classification of workers in the gig economy is the major battleground between unions and tech giants, with the likes of Uber and Deliveroo arguing its delivery workers are independent contractors and it does not have to provide them with employee benefits like superannuation or insurance.
But the unions have launched a major campaign this year to combat this, and have been calling on the federal government to legislate to protect the rights of workers in the gig economy.
The FWC has now ruled that Foodora must pay the sacked worker more than $15,000 in unpaid wages within three weeks.
In its decision, Commissioner Ian Cambridge found that in the specific case before him, the worker was incorrectly classified as an independent contractor when they were actually an employee.
“In this instance, the correct characterisation of the relationship between the applicant and the respondent is that of employee and employer,” Commissioner Cambridge said.
“The conclusion must be drawn from the overall picture that has been obtained, was that the applicant was not carrying on a trade or business of his own, or on his own behalf, instead the applicant was working in the respondent’s business as part of that business,” he said.
“The work of the applicant was integrated into the respondent’s business and not as an independent operation. The applicant was, despite the attempt to create the existence of an independent contractor arrangement, engaged in work as a delivery rider / driver for Foodora as an employee of Foodora.”
Although the FWC was clear in stating that similar decisions would have to be judged on a case-by-case basis, if similar verdicts were applied to the likes of UberEats or Deliveroo, it would have major ramifications on their operations in Australia and may lead them to follow in Foodora’s footsteps and leave the country entirely.
The TWU is now looking for further cases of riders working for Foodora or other gig economy companies like Uber or Deliveroo.
“There are a series of cases that workers are talking to us about that are from other companies right across rideshare and food delivery. We’re imploring Foodora workers and workers from other companies to come forward,” Mr Sheldon said.
The TWU will soon be meeting with other riders in capital cities across Australia to look at bringing similar cases back to the FWC.
Arrangements in the gig economy should be “subject to stringent scrutiny”, Commissioner Cambridge said, as they are being used to avoid responsibilities and obligations like paying tax and providing benefits.
“As corporate tax rates reduce and become lower than comparable marginal rates of personal income tax, incentive is created for the creation of a contractor relationship rather than one of employment,” he said.
“Corporations logically recognise the many potential benefits in engaging individuals to perform work utilising the machinery of independent contractor arrangements,” he said.
“If the machinery that facilitates contracting out also provides considerable potential for the lowering, avoidance, and / or obfuscation of legal rights, responsibilities, or statutory and regulatory standards, as a matter of public interest, these arrangements should be subject to stringent scrutiny.”