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FWC rules Deliveroo rider was a contractor, not an employee

Sep 06, 2022


  • 2min

FWC rules Deliveroo rider was a contractor, not an employee

Industry News

The Fair Work Commission full bench has overturned a ruling that decided a Deliveroo motorbike rider was an employee and had been unfairly dismissed due to poor performance. The verdict, which was a landmark case in May 2021, determined that the rider was an employee and therefore was entitled to minimum wage and benefits as relevant to their position.

Deliveroo appealed this decision, and in August 2022, the FWC full bench overturned the earlier ruling. This decision means that Deliveroo workers and others in similar positions within the gig-economy cannot lodge claims of unfair dismissal in the future.

The FWC stated that the original decision was correct at the time of the ruling, but the verdict was no longer valid due to new cases and precedents set since.

The full bench applied the principles of a High Court case (Personnel Contracting and Jamsek) as follows:

  • Determining if someone is an employee or a contractor is subject to a written, comprehensive contract “which is not a sham or otherwise ineffective, the question is to be determined solely by reference to the rights and obligations under that contract”
  • It should not consider the performance of the contract or dealings between the parties (unless the terms of the contract were varied)
  • The multifactor approach only has relevance in respect of the required assessment of the terms of the contract
  • Existence of a contractual right to control the activities of the worker (including how, where and when the work is done) is a major signifier of an employment relationship
  • The label or characterisation placed on the relationship by the contract is not relevant when determining its status.

The gig-economy is still evolving, so we can expect to see more changes and different rulings in the future. If you have independent contracting agreements, you should revise them immediately and ensure they align with the latest legislation. If you need any assistance, please call us on 1800 868 254.

In their ruling, the FWC decided that: “The consequence of this conclusion is that Mr Franco was not a person protected from unfair dismissal within the meaning of s 382 of the FW Act and the Commission had no jurisdiction to entertain his unfair dismissal application nor power to grant him the remedies that it did. The Commissioner’s decision and order must therefore be quashed, and Mr Franco’s unfair dismissal application must be dismissed as incompetent. Regrettably, this leaves Mr Franco with no remedy he can obtain from the Fair Work Commission for what was, plainly in our view, unfair treatment on the part of Deliveroo.”

Read the Fair Work Commissions’ full decision here.

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