The FWC has reignited the employment status of gig economy workers debate again after a Deliveroo delivery rider was determined to be an employee in Diego Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818 (18 May 2021).
The decision is the latest in a mixed bag series of decisions over the last few years which have seen gig economy workers found to be employees and others to be independent contractors.
The well-established legal principles regarding whether a person is an employee or an independent contractor have been challenged in recent years by the unique and novel ways of engaging gig economy workers.
In previous decisions regarding Uber ride share drivers and delivery drivers, these non-traditional ways of allocating work, including the acceptance and rejection of jobs through Uber’s app platform, have swayed FWC decision makers to find those individuals to independent contractors.
This includes, most infamously, in a FWC Full Bench decision which determined an Uber delivery driver was not an employee of Uber, but also not an individual conducting a business in their own right – a traditional element of an independent contracting arrangement.
However, in a shift in the application of the established legal principles, Commissioner Cambridge has, in the Diego decision, found a delivery rider to be an employee, emphasising the relationship between Mr Franco and Deliveroo needed to be assessed in “the context of a modern, changing workplace impacted by our digital new world”.
In rejecting Deliveroo’s arguments to the contrary, Commissioner Cambridge found Deliveroo could exercise control over Mr Franco (and, by extension, all of its riders) since it controlled and had access to the considerable data relating to the performance and activities of those who use the app. Despite it appearing Mr Franco had control through his ability to accept and reject deliveries, Commissioner Cambridge emphasised this was an illusion of control and Deliveroo could exercise significant control over when, where and for how long Mr Franco worked if it chose to do so.
Commissioner Cambridge also departed from previous decisions in rejecting Deliveroo’s argument that Mr Franco’s “multi-apping” (being signed into multiple delivery app platforms simultaneously) prevented an employment relationship from existing, emphasising the lack of requirement for a physical, single workplace and the introduction of new technologies meant it was possible an individual could work for two or more employers at once.
The decision is a reminder of the continuing tenson which exists between the traditional common law principles of employee vs independent contractor and the modern ways of performing work. The decision will likely add to the growing chorus of voices seeking different characterisation and treatment for individuals participating in the gig economy.
Mr Franco was reinstated with backpay. Deliveroo has indicated it will appeal the decision.
Lessons for employers
- Potential labour costs benefits arising from shifts to a gig economy-based service model should be assessed in context of this continually shifting application of well-established legal principles.
- Employers should be aware there is likely to be continued agitation of this issue before the tribunals and Courts and increased regulation is likely to follow.
Written by Mathew Reiman
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