Unfair dismissal claim against Deliveroo may have widespread consequences for the gig economy

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A former rider for Deliveroo has taken the food-delivery service to the Fair Work Commission (FWC) in an unfair dismissal case.

Diego Franco’s contract was terminated in April after working for Deliveroo for three years. Mr Franco claims that he was an employee and was sacked without warning at the height of the pandemic.

The Transport Workers’ Union (TWU) claims that this case is the “first of its kind” against Deliveroo, following a similar case against Foodora in 2018.

In 2018 the FWC found that Foodora had unfairly dismissed a rider after he publicly raised concerns about the dropping pay and conditions for riders. Foodora was ordered to pay $15,559 to the former rider and subsequently exited the Australian market.

TWU National Secretary, Michael Kaine, hailed the case against Deliveroo as an important safeguard of workers’ rights.  

“We believe this case could have significant implications for the gig economy in Australia and, with the absence of Federal Government regulation in this sector, this is a way to hold companies to account,” he said.

“This is the type of work which is included in ABS ’employment’ statistics, yet these aren’t jobs and the workers have no rights. This is not a good basis to build your economy on and lowers labour standards to a Dickensian level.”

This case is important because the classification of riders as either “independent contractors” or “employees” determines whether riders are entitled to certain rights. For instance, if riders are classified as employees they are entitled to minimum wage, leave and superannuation contributions.

Deliveroo has denied Mr Franco’s claim.

Deliveroo states that Mr Franco’s contract ended because of “repeated slow deliveries” and in a statement confirm that Mr Franco had been notified of this prior to the notice to end his agreement.

“We confirm that in the three months prior to the notice to end his agreement, Deliveroo notified Mr Franco twice regarding poor delivery outcomes,” said a Deliveroo spokesperson.

The food-delivery service claims that riders such as Franco are independent contractors, which would preclude their right to bring unfair dismissal challenges.

“Riders have the absolute freedom to decide whether, when and where they work, and if they do go online they can decide how long to work. Riders can and do work with multiple platforms, including competitors, at the same time. They can also freely reject orders offered to them as there is no obligation to work.

“We are confident that riders are engaged as independent contractors.”

Amidst this legal battle, the TWU has foregrounded worsening pay and working conditions for riders in Australia.

A survey from the TWU found that last month, average earnings of delivery riders was just over $10 an hour. It also found that almost 90 per cent had seen their pay decrease and 70 per cent are struggling to pay bills and buy food.

Last month, two Sydney riders were killed on the job. More than one in three riders has been injured on the job with 80 per cent not receiving support from their company.

“The TWU is pushing for regulation of the gig economy. We want workers to have rights and for the Dickensian-style exploitation to end. The Federal government can no longer continue to ignore the reality of life for gig workers,” said Mr Kaine.

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