The Fair Work Commission has established a Foodora delivery rider was engaged as an employee, rather than an independent contractor as claimed by the business, who subsequently had access to unfair dismissal.
The employee filed an application for an unfair dismissal remedy on 14 March 2018 after being informed via email by the food delivery service that his service contract was terminated. The employee worked at Foodora from 11 March 2016 under a written agreement specifying he was engaged as an ‘Independent Contractor’.
The Commissioner scrutinized the nature of the relationship in a multifactorial examination which looked at the “totality of the relationship”.
“The conclusion that 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. The work of the applicant was integrated into the respondent’s business and not 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.”
Commissioner Ian Cambridge held that the “correct characterisation” of the relationship between the applicant and respondent was that of an employee and employer.
The Commission then continued to find there was no valid reason for the dismissal of the applicant regarding either conduct or performance. Rather the dismissal was based around “potentially breaching confidentiality and intellectual property rights”, as the applicant had control over a chat group used by Foodora delivery riders, which he refused to hand over administrative rights to the company. The reason for dismissal was not “sound, defensible or well-founded”.
Further the procedure behind the dismissal was ruled “plainly unjust, manifestly unreasonable, and unnecessarily harsh” as the employee was advised his services would no longer be required via email. Reinstatement as a remedy was not considered as the business has since been placed in voluntary administration. The employee was compensated $15,559.
Lessons for Businesses
Businesses must be conscious when engaging independent contractors, ensuring the agreement is genuine in the sense that the relationship truly resembles a contracted service arrangement, rather than the engagement of an employee.
How we can assist
Contact the Workplace Relations Advice Line on 03 8662 5222 for further information on the differences between independent contractors and employees.
Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claim.
Written by Nicole Pritchard, Workplace Relations Graduate Advice Line Advisor
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