Gig Workers and Employee Entitlements 3.0

Australia’s recent judicial history has extensively considered the work status of food delivery and rideshare service workers. There is particular focus on the distinction between employees and contractors. This includes the exit of Foodora from the Australian market after a rider’s claim against unfair dismissal, the formal inquiry into Uber and UberEats, and most recently a successful claim for unfair dismissal against Deliveroo. However, results have been mixed. While the Foodora case ruled a rider was an employee, another case ruled that an UberEats driver was a contractor. Unlike the UK, Australia does not enjoy a third, intermediate category called “worker” that might be better able to bridge the gap between what makes somebody an employee or a contractor.

The most recent Deliveroo decision, while holding that the rider was unfairly terminated, doesn’t do much to improve the certainty of gig economy workers in Australia. The only certainty, as put by Commissioner Cambridge of the Fair Work Commission when handing down the decision, is that the gig economy is at the centre of “the modern, rapidly changing workplace”. This means that employers, such as the various applications that offer food delivery and rideshare services, cannot necessarily rely on more ‘traditional’ aspects of a contractor relationship. While their workers are not under a particular obligation to actually perform work, and when they do perform work they are permitted to service multiple applications simultaneously, the entire picture of the relationship may suggest an employment relationship.

While Deliveroo has already launched their appeals process against the unfair dismissal, it is clear that this decision has massive implications for how such applications operate. After the decision, UberEats rapidly submitted a statement that their application operates differently from Deliveroo. However, when rideshare and food delivery drivers served to keep businesses in operation and help people obtain safe transport during a pandemic, it may well be in the public’s interest to provide some employment protections to them. Nonetheless, engaging all drivers and riders as employees would mean rising costs for these applications, which would change the current business model. This might mean a reduction in workforces, or increasing prices for consumers and restaurants. While it is tempting to speculate what such decisions mean for the industry, it is too difficult to say as of yet – though following Menulog’s upcoming trial of an employment model could prove informative.

What we can say for employers who engage contractors in the gig economy is to keep in mind the entire picture of the work relationship. While your contractor may not wear uniforms and may be in control of when they perform work, if you operate substantial control over their access and ability to perform work, there may be a question as to whether the work relationship is more reflective of an employment relationship.

 If you wish to learn more about the distinction between employees and contractors, as well as their entitlements, you may speak with one of our experienced employment lawyers. Call us at (02) 4929 7002, email us or complete an enquiry form.