By Charles Power
There has been substantial media coverage of the recent decision of the Fair Work Commission (FWC) in Klooger v Foodora Australia Pty Ltd (2018).
The decision concerned an unfair dismissal claim brought by a Foodora delivery rider. The FWC would not have any jurisdiction to determine the claim unless the applicant could show he was an employee. The FWC ruled the applicant was an employee.
The applicant had signed a service contract that stipulated he had been engaged as an independent contractor and not an employee. The service contract provided for him to receive $14 for each hour, plus $5 per delivery.
To work, the applicant logged into his ‘shifts app’ that displayed available shifts for each week.
The shifts were identified with start and finish times and a specific geographical location where the delivery work would be undertaken. The applicant would accept the particular shifts that he found most desirable and commit to undertake the selected shifts in the identified geographical location.
The FWC observed the method of allocating work was similar to that used to notify casual employees of available shifts.
Although the service contract document appeared to go to considerable lengths to stipulate the contractor is not an employee, and to reinforce that the document is constructing a relationship of principal and independent contractor, the FWC observed that many provisions were similar in form and substance to those that would ordinarily be found in an employment contract document.
Examples cited were clauses dealing with rostering and acceptance of jobs, what the courier would wear at work and requirements to comply with policies and practices.
According to the FWC, the following features pointed to the relationship being one of independent contractor:
- the applicant performed some limited work for other delivery companies at different times, and this was permissible under his contract with Foodora (although the FWC observed this was no different to a casual employee having two jobs), and
- the applicant could sub-contract his work to another rider if unable to perform the work and with Foodora’s consent (again the FWC observed this was not dissimilar to a casual employee swapping shifts).
The FWC observed the following features as being consistent with its ultimate ruling that the relationship was employment:
- Foodora had considerable capacity to control the manner in which the applicant performed work. It fixed the place of work and the start and finish times of each engagement or shift. In reality, the applicant could not pick and choose when and where to work, or how fast or slow to make deliveries.
- The applicant did not have a separate place of work, nor did he advertise his services to the world at large.
- He did not have a substantial investment in the capital equipment that he used to perform his delivery work. The bicycle that he used for delivery work was also used generally for non-work-related bicycle activities.
- Foodora presented the applicant to the world at large as an emanation of its business. The applicant would dress in Foodora branded attire, and utilise equipment displaying the livery of the Foodora brand.
- The applicant was paid on a regular basis in respect to the completed shifts within each week (albeit with no PAYG deductions and no payment for leave).
- The conduct of the applicant in his work for Foodora would potentially create (or damage) its goodwill.
- The applicant did not spend a significant proportion of his remuneration on business expenses.
Based on this, the FWC ruled the applicant was not carrying on a trade or business of his own, or on his own behalf. Instead the applicant was working in Foodoora’s business as part of that business.
The applicant was integrated into Foodora’s business and not an independent operation.
He was an employee, not an independent contractor.