Deliveroo loses test case as Fair Work makes ruling on employee status

The Fair Work Commission has delivered a major ruling in the ongoing legal debate over whether food delivery couriers should be classed as employees.

Deliveroo lost its test case this morning after Fair Work Commissioner Ian Cambridge ruled Diego Franco was operating as an employee when he was removed from the app last year. Gig economy employers like Deliveroo and Uber have faced challenges in court over the past year after arguing that drivers and riders are “independent contractors” – and therefore do not qualify for the right to a minimum wage, paid leave allowance and protection from unfair dismissal.

With the help of the Transport Workers Union, Franco brought the case to court last year after he was removed from the app with seven days notice.

Today’s ruling is the first decision of its kind by the Fair Work Commission after Uber settled a test case brought by driver Amita Gupta earlier this year. It follows the UK Supreme Court's decision to uphold an employment tribunal ruling which argued Uber drivers were acting as “workers”, rather than independent contractors. Uber had been determined to fight the case and is now attempting a legal challenge in the EU.

Read more: Huge legal case could be a body blow to the gig economy

Contacted by HRD, Deliveroo said it planned to appeal today’s decision.

“We do not accept the premise upon which the decision was taken and do not believe this reflects how Deliveroo riders work with the company in practice.

“We are confident that riders are engaged as independent contractors. 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 and can freely reject any offer of work offered to them. Riders don’t need to provide personal service - they can and do use delegates to complete deliveries. Riders can and do work with multiple platforms, including competitors, at the same time - as Mr Franco did himself.

“Riders frequently tell us that the freedom that comes with self-employment is the key reason why they choose Deliveroo, and we will appeal this decision to protect those freedoms.”

Read more: Menulog signals shift to employee model in major move for gig economy

TWU National Secretary Michael Kaine said the ruling is an “important judgement” and one that puts Australia in line with other countries in legislating the gig economy.

“This ruling has huge implications for gig workers in Australia and we urge the Federal Government to look at it today and to start devising regulation now,” he said.

“The treatment of gig workers isn’t just unfair, it is deadly. Riders work under the spectre that they may get sacked at any moment and are forced to risk their lives to make deliveries quickly. Between September and November five delivery riders died while working. We want the Federal Government to regulate in the right way and to put in place a tribunal with full powers to regulate on gig workers’ rights and protections.”