Foodora rider classed as employee and wins unfair dismissal case
Riders for the collapsed food delivery company Foodora have asked the federal government to sue the firm’s German parent after the administrators conceded the dispatchers were “more likely than not” employees.
On Friday, the Fair Work Commission also ruled a Foodora rider was an employee not a contractor, upholding a case of unfair dismissal and ruling the company should pay the worker $15,000 in compensation. The decision could have flow-on effects for other gig economy companies such as Uber, Uber Eats and Deliveroo.
Other riders – many of whom sustained injuries on the job – are pursuing the German company Delivery Hero for $8.5m in unpaid wages and workers’ compensation, and want the government to help.
Foodora closed its operations in Australia in August and last week the administrators of the company admitted they probably owed the workers $5m because they had been incorrectly classed as independent contractors.
The Transport Workers Union’s Tony Sheldon said the administrators’ admission was a “breakthrough decision” that would have an impact across the world.
“Three out of four riders know of a rider that have been injured seriously, riding for companies like Foodora,” he said. “Yet these companies continue to deny responsibility.”
Eyder, a former Foodora rider who declined to give his surname, said he had been refused compensation when he injured his shoulder on the job.
“When I had the accident on my motorbike, the first call from Foodora, they told me ‘You are not an employee, you are a contractor’. I couldn’t work for three months, and when I came back to Foodora I lost all my performance [history]”.
Foodora requires riders to work consistently to rise up their priority list and Zede said he was dropped to the lowest grade.
“When I went to the office, they said they didn’t care,” he said.
Under Australian labour law, independent contractors are not entitled to award wages, leave and other entitlements such as workers’ compensation, which are available only to employees.
Companies such as Foodora, Uber and Deliveroo class their workers as contractors, but riders, unions and the Fair Work Ombudsman have long argued that gig economy workers are employees – because of the long hours they put in and the high level of control the companies exert.
Last week, the administrators of Foodora agreed, and on Friday, the Fair Work Commission ruled this was the case for one rider, Josh Klooger.
Commissioner Ian Cambridge said the control Foodora exerted over Klooger’s shifts and uniform made the relationship that of “employee and employer”, and upheld Klooger’s complaint of unfair dismissal.
“The shifts’ start and finish times and the particular geographical locations were fixed by Foodora … This process is similar to a variety of electronic and web-based systems that are frequently used to advise, in particular, casual employees of available shifts.”
The company’s uniforms and branded carry bags meant “Foodora presented [Klooger] to the world at large as an emanation of its business”.
“The correct characterisation of the relationship,” he wrote, “is that of employee and employer”.
The commission ordered Foodora to pay Klooger $15,000 in compensation.
Last week, Foodora’s administrators estimated that, if paid the lowest casual rate, the riders would be entitled to $28m in wages, but were paid only $23m.
However, the company also had other debts, and could not pay them all, the administrators said. It owed $2.1m in unpaid tax to the Australian Taxation Office, as well as $550,000 to Revenue NSW and an estimated $400,000 to Victoria and Queensland revenue.
The administrators offered a $3m payout, towards all creditors – including the workers – to partially cover some of the debts. The creditors met on Friday and voted to approve the offer.
Sheldon said the TWU wanted the federal government to pursue Delivery Hero for the full amount – estimated at $8.5m for wages and compensation for injury.
“We expect the receivers to encourage national authorities to go and lay criminal charges against the German parent company,” he said. “There is a responsibility of companies to pay up, not just run out of the country when you act in such an indignified way by carrying out wage theft against these workers.”
The president of the Australian Council of Trade Unions, Michele O’Neil, echoed the call, but said she was not confident the government would listen.
“We see this government time and time again take the side of big business. But we won’t stop making sure we call for them to do it, and campaign for them to do it”.
Sheldon said the riders voted for the $3m payout at Friday’s meeting – “they have no choice. They have been stolen from and can’t wait three years.”