Fair Work setback for gig workers

Fair Work full bench upholds Deliveroo appeal and quashes finding that rider was an employee, not an independent contractor.

Former Deliveroo rider Diego Franco. Picture: Supplied

The Fair Work Commission has overturned a significant ruling that a Deliveroo rider was an employee, finding a High Court decision required it to “ignore certain realities” about the working relationship between the platform and the worker.

In a decision with impli­cations for the rights of gig economy workers, a Fair Work full bench criticised Deliveroo’s “unfair treatment” of Diego Franco, but quashed an earlier ruling that he was an employee, not an independent contractor.

Upholding Deliveroo’s appeal, the full bench said while the commission decision last year that Mr Franco was unfairly dismissed was correct at the time, the High Court’s statement of the law in the subsequent Personnel Contracting decision rendered the finding erroneous.

The High Court found the terms of a contract must be used to determine employment status rather than the nature of the work.

Much of the initial proceedings focused on Mr Franco’s employment status, with Deliveroo maintaining he was an independent contractor with no unfair dismissal claim rights, while the Transport Workers Union argued he was an employee and could pursue a legal remedy for his sacking.

Given the High Court decision, the full bench said it analysed the question to be determined by referring only to the terms of a 2019 written agreement between Deliveroo and Mr Franco. It said it had to ignore how Deliveroo’s booking system provided it with a significant degree of operational control over its delivery workers and how he was strongly encouraged by Deliveroo to use a Deliveroo-branded insulation bag and uniform, presenting himself to customers as an “emanation of the Deliveroo business”.

“As a matter of reality, Deliveroo exercised a degree of control over Mr Franco’s per­form­ance of the work, Mr Franco presented himself to the world with Deliveroo’s encouragement as part of Deliveroo’s business, his provision of the means of delivery involved no substantial capital outlay, and the relationship was one of personal service,” the full bench said.

“These matters, taken together, would tip the balance in favour of a conclusion that Mr Franco was an employee of Deliveroo. However, as a result of Personnel Contracting, we must close our eyes to these matters.”

TWU national secretary Michael Kaine said the Albanese government must urgently introduce reform to address the “archaic system which provides rights like unfair dismissal only to workers deemed employees”.

“Diego was unfairly terminated with no warning, a finding agreed upon twice by the Fair Work Commission. Despite this appalling act by Deliveroo, Diego and his family have had justice ripped away from them for no reason other than an outdated legal system which fails to represent the present day working world.”

Deliveroo said its riders were self-employed “as only this way of working enables riders to be their own boss and base their work around their lives, not vice versa. It’s time to move on from the topic of status and look at developing the right national reform framework to allow us to give riders the security and benefits they deserve.”