A Fair Work ruling which says delivery riders can work for multiple companies and still be considered employees is being challenged by Deliveroo

(Photo by Matthew Horwood/Getty Images)
  • Food delivery giant Deliveroo is challenging a ruling last month by the Fair Work Commission (FWC) which found a dismissed rider was more like an employee than an independent contractor.
  • The ruling, which acknowledged technology and the pandemic meant traditional employment had “changed dramatically”, has implications for the future of work, experts suggest.
  • The appeal by Deliveroo seeks to challenge a finding that suggests riders can work for multiple platforms and still be considered employees.
  • Visit Business Insider Australia’s homepage for more stories.

UK-based food delivery platform Deliveroo is challenging a ruling by the Fair Work Commission (FWC) last month that said its worker was morel like an employee despite being classified as an independent contractor by the company.

The key tenet of the ruling was that changes to the nature of employment, along with developments since the start of the pandemic, meant it was no longer reasonable for companies to refuse to consider its workers employees if they work for multiple companies at the same time.

But, beyond that, the ruling has wider implications for the future of work, experts say, as the gig economy permeates more industries and makes it more likely people will be involved in work that doesn’t tie them to a single job or employer.

Responding to the ruling, some experts have also suggested the case is likely to not only influence whether companies need to pay minimum rates and conditions, but could also indirectly challenge how employees are treated by the law more broadly.

Deliveroo’s appeal also comes amid pressure from riders and industry groups to improve worker safety and conditions generally; a global movement that hit home last year when five delivery riders were killed in the space of a few months in NSW.

Since then, the NSW government has unveiled a proposal for new laws that would empower police, SafeWork and Transport for NSW to increase compliance activity.

Advocacy groups and riders themselves told Business Insider Australia the response will not help make delivery jobs safer, and that better pay would be more effective at improving working conditions.

Food delivery riders participated in a protest against the new laws outside NSW Parliament on Wednesday, organised by the Transport Workers Union (TWU).

FWC ruling suggests delivery riders are employees regardless of non-exclusive employment

The FWC ruled on May 18 in favour of former Deliveroo rider Diego Franco, finding that he had been unfairly dismissed by the company in 2020.

The case, ongoing for months, centred on whether or not Franco as a delivery rider could legitimately be classed as a contractor. By refusing to classify workers as employees, companies have avoided having to grant specific rights and entitlements like sick leave and guaranteed pay rates.

However, the ruling found that the terms of work for these workers were closer to employees than contractors.

Deliveroo, along with other on-demand delivery apps like Uber Eats and Menulog, have in the past relied on the understanding that many riders carry out deliveries for competitors simultaneously — a common practice that helps them make more money during busy periods — to ensure they do not have the traditional exclusivity that defines an employment relationship.

However the ruling in May by the industrial relations tribunal challenges this understanding of the conditions required for a worker to be considered an employee.

Commissioner Ian Cambridge, said, when delivering the ruling, that traditional employment arrangements had “changed dramatically” in response to the pandemic and remote working meant non-exclusivity was no longer necessarily evidence against someone being considered an employee.

“The prospect that an individual might be simultaneously engaged in, for example, multiple online customer service chatrooms, and call centre activities, and online telemarketing, for two or more employers, is in reality, only restricted by either the number of web access points available to that individual, or any prohibition on secondary employment stipulated by a particular employer,” Cambridge said.

What the ruling means for workers’ rights in the gig economy

Michael Kaine, national secretary for the Transport Workers Union, told the Australian Financial Review the judgement “makes clear that this change does not mean workers’ rights can be trashed.”

Kaine said the Cambridge decision “recognises that technology has fundamentally changed the way jobs operate and the way employers exercise control,” a factor that has previously enabled the delivery giants to sidestep current employment laws that protect worker rights.

He told Business Insider Australia that proposed laws by the NSW government show the contiued “power of these companies” to influence legislation.

While globally, delivery companies have put their weight behind maintaining the current business model — earlier this year Uber spent US $700 million in the US pushing for legislation that would exempt tech companies from complying with labour laws — the ruling signals a power shift toward worker rights.

Andrew Stewart, professor at the University of Adelaide, told the Australian Financial Review the riders’ lack of exclusivity was a “critical” factor in the full bench decision but questioned whether it was correct.

Stewart argued that many employees have two jobs, where “at any moment they might be doing one or other of those jobs depending on what’s requested,“ for example a consultant hired as an employee but working for multiple employers.

However he agreed that simultaneous employment raised questions about how firms should apply hourly rates, leave accrual and minimum engagement times as well as employee duties of good faith and fidelity.

“If it’s accepted that workers finding work through platforms are employees, particularly if it’s found they can have multiple employment relationships, then there is a whole series of questions that then arise,” he said.

In its appeal, Deliveroo is challenging the finding that riders’ “almost unfettered” right to delegate deliveries was the equivalent of casual employees’ ability to swap shifts, saying it ignores the fact that a casual employee can’t swap shifts without their employer’s approval.

It is also arguing that the company’s collection of riders’ data should not be a factor demonstrating its significant control, saying this was simply its app allowing it to monitor the adequacy of its services.