Menulog argues it needs a modern award that is ‘purpose built’ for the industry as it moves to reclassify its workers as employees

Menulog argues it needs a modern award that is ‘purpose built’ for the industry as it moves to reclassify its workers as employees
  • Menulog says a new modern award is required that specifically covers the “on demand delivery industry.”
  • It has presented a case to the Fair Work Commission (FWC), along with other industry stakeholders.
  • The Transport Workers Union supports the company’s move to reclassify its workers as employees, but believes existing frameworks will better protect workers.
  • Visit Business Insider Australia’s homepage for more stories.

Menulog has asked the Fair Work Commission (FWC) to create a new award to govern how it should pay employees that would specifically cover the “on demand delivery industry.”

However while the Transport Workers Union (TWU) has backed the company’s move to reclassify workers as employees, it disagrees that a new category is needed for workers in the sector. 

The FWC on Monday held a hearing into Menulog’s application to create a new remuneration category for its workers, with a decision expected in late January next year. 

Along with providing protections specifically for food delivery workers, the push to create an award for newly-created employees working in the gig economy could function as a guide for other companies in the industry looking to reclassify workers in Australia, the company said. 

The Transport Workers Union says the existing award is fit for purpose

In recent months, a raft of decisions have been handed down across various markets that host gig economy riders have forced companies to reclassify their workers as employees. 

In March, Uber announced all of its British drivers would be reclassified as workers, as opposed to contractors, guaranteeing them the minimum wage, as well as paid holiday leave, the pension and other conditions, following a landmark ruling by the country’s Supreme Court.

And in Australia the FWC ruled in May that a former Deliveroo rider had been unfairly dismissed by the company as the work he was undertaking was more like that of an employee than a contractor. 

While there are two award schemes that could potentially cover couriers currently working for food delivery platforms; the Fast Food Industry Award 2010, and the Road Transport and Distribution Award 2020, neither were designed to specifically cover the needs of delivery riders, Menulog contends.

Nor can they “accommodate the unique needs of the Courier Network or the On Demand Business”.

The TWU has argued riders should be classified under the existing Road Transport and Distribution Award (RTD), which covers employers throughout Australia in the road transport and distribution industry and their employees. 

In its submission, the TWU said that the terms and conditions in the RTD are superior to those in the draft award proposed by Menulog. 

Michael Kaine, national secretary of the TWU, told Business Insider Australia the union welcomed Menulog’s moves to take the first step in adjusting its classification of workers, but that the award “must ensure that existing terms and conditions for transport workers are not undermined.”

“If we can get that balance right in the award system then we will also still need to ensure that others, like UberEats and Deliveroo, stop deliberately misclassifying work,” Kaine said. 

The activities of riders who work for Menulog are different to that of the company overall, the union has argued. 

However Brendan Avallone, the representation for Menulog, told the hearing that the TWU was focusing on the worker’s activity rather than taking a holistic view of the needs of the industry, which it said is “a new industry that simply did not exist 13 years ago.” 

“That would be the wrong approach, because this is an industry-based award,” Avallone said. 

The industry was “new, and did not exist when these awards were developed,” he said, and needed a legal framework that was “purpose-built for that industry.” 

Menulog commits to reclassifying workers as employees

The hearings follow an application submitted by Menulog to the FWC in June to “make a new modern award covering the ‘on demand delivery services industry’”; a result of the company’s contention that the sector is currently not covered by any operative modern award.

Since 2015, the gig economy has expanded, with its workforce growing substantially to an estimated 250,000 workers. 

In response to industry growth, mounting legal cases pushing against the classification of gig workers  as ‘independent contractors’, and scrutiny of the sector following five rider deaths in Sydney in 2020, Menulog announced in April it was undertaking a trial to treat its riders as employees rather than independent contractors. 

The company’s trial in the Sydney CBD offered a minimum wage, sick leave, superannuation, and other entitlements that are not usually provided to independent contractors. 

At the time Menulog’s chief executive Morten Belling told the Select Committee on Job Security that rider safety could be improved by classifying riders as employees, as workers would feel less pressure to “move as quickly through traffic as possible” if they were offered an hourly rate instead of payment on a per-delivery basis.

“If you move to a different model where you pay by the hour, you could limit that, if not eliminate it,” Belling said.