GIG ECONOMY LITIGATION DATABASE
Deliveroo Australia Pty Ltd v Franco (2022)
Citation/case number: [2022] FWCFB 156
Country: Australia
Year: 2022
Court: Fair Work Commission (Full Bench)
Status: Determined
Topic/theme: Employment relationship
Issue: Unfair dismissal
Claimant type: Individual
Respondent type: Corporation
Legislation considered: Fair Work Act 2009 (Cth), ss 380, 382, 386, 394
Factual background and procedural history
The claimant commenced working for Deliveroo as a delivery rider on 22 April 2017, pursuant to a standard form supply agreement. Prior to commencement, the claimant attended an onboarding session at a Deliveroo premises along with other riders, at which he was provided with information about how to use the Deliveroo platform; where services could be performed; requirements in respect of safe operation of the performance of services. The claimant was also offered Deliveroo-branded clothing and related equipment in exchange for a bond to be deducted from his first four fortnightly payments, which offer he accepted.
Between 19 October 2017 and 3 February 2020, Deliveroo sent several emails to the claimant identifying aspects of his performance of delivery services it considered to be poor or inadequate and providing a warning about the potential for those matters to lead to the termination of his supply agreement. Broadly, these matters related to the claimant having marked orders which had not been received as delivered, and delays in the claimant's delivery times. In April 2020, Deliveroo undertook a review of rider accounts associated with customer complaints. That review identified the claimant as having significantly delayed delivery times, which led to a decision to terminate his supply agreement. The claimant was notified of this by email on 23 April 2020.
On 21 May 2020, the claimant applied to the Fair Work Commission for an unfair dismissal remedy pursuant to section 394 of the Fair Work Act 2009 (Cth), seeking reinstatement, continuity of service and backpay. The claimant's application was made on the basis that he was properly characterised as an employee of Deliveroo. In response, Deliveroo asserted that the claimant was not an employee of Deliveroo, but rather an independent contractor, and in any event the dismissal of the claimant was not harsh, unjust, or unreasonable. The Commissioner held that the claimant was an employee of Deliveroo, and that he was dismissed unfairly. As such, orders were made for reinstatement, continuity of service and backpay pursuant to section 394 of the Fair Work Act. Deliveroo subsequently appealed against this decision to the Full Bench of the Fair Work Commission.
Key issues for determination
(1) Was the claimant an employee of Deliveroo so as to be entitled to an unfair dismissal remedy under section 394 of the Fair Work Act?; and (2) if so, was the claimant's dismissal unfair in the sense that it was harsh, unjust or unreasonable?
Finding
The Full Bench first observed that the approach adopted by the High Court in recent cases concerning the existence of an employment relationship meant that rather than undertaking a broader multifactorial assessment of how the relationship between Deliveroo and the claimant operated in practice, it was required to focus on the contractual rights and obligations of the parties under the supply agreement (at [33]-[38]).
In accordance with this approach, the Full Bench undertook a detailed analysis of various clauses of the supply agreement, ultimately identifying four aspects of the agreement which it said were inconsistent with the existence of an employment relationship and weighed decisively in favour of a finding that the claimant was engaged as an independent contractor:
- The fact that the terms of the agreement indicated a lack of control by Deliveroo over the manner of performance of any work which the claimant agreed to undertake. When the claimant elected to provide services, he exercised a substantial degree of discretion in relation to the performance of those services. Amongst other things, this discretion extended to the type of vehicle and other equipment used and the route taken when performing deliveries. The requirements for deliveries to be made within a reasonable time period and to act professionally when performing delivery services and to provide the services with due care, skill and ability did not detract from this conclusion, as the claimant still retained the discretion to determine the means by which services may be performed to the required standard (at [46]-[47]).
- The fact that the agreement required the claimant to provide, at his expense, the vehicle used to make deliveries. Because the supply agreement allowed this vehicle to be something other than a bicycle, this could have involved the claimant providing a 'substantial item of mechanical equipment' such that 'the personal is overshadowed by the mechanical' (at [48]).
- The absence of a requirement under the supply agreement for the claimant to provide the services personally. Instead, the agreement provided the claimant with a right to delegate the performance of relevant services without Deliveroo's prior approval, provided that the delegate had the requisite skills and training and was renumerated appropriately (at [49]).
- The requirement under the supply agreement for the claimant to pay an administrative fee for access to Deliveroo's software and for Deliveroo providing the service of rendering invoices and other administrative services (at [50]).
Interestingly, the Full Bench also referred to a number of practical realities about the relationship between Deliveroo and the claimant that it was obliged to ignore in light of the recent High Court jurisprudence. Specific mention was made of the fact that, as a matter of reality, Deliveroo exercised a degree of control over the claimant's performance of the work, that the claimant presented himself to the world as part of Deliveroo's business with Deliveroo's encouragement, that the claimant's provision of the means of delivery involved no substantial capital outlay, and that the relationship was one of personal service. The Full Bench went to great lengths to emphasise that, had it been permitted to take these matters into account, a different conclusion would have been reached on the appeal, as these matters, taken together, would tip the balance in favour of a conclusion that the claimant was an employee of Deliveroo. However, as a result of the High Court's recent decisions, these matters could not be taken into account (at [52]-[54]).
On this basis, the Full Bench concluded that the Commissioner had erred in finding that the claimant was an employee of Deliveroo immediately prior to the termination of his engagement. As such, the claimant was not a person protected from unfair dismissal under section 382 of the Fair Work Act and the Commissioner therefore had no jurisdiction to hear his application nor grant the remedies he did. Accordingly, the Commissioner's decision was quashed and the claimant's application was dismissed.
Outcome
The claimant was found to be an independent contractor rather than an employee of Deliveroo, such that the Fair Work Commission did not have jurisdiction to hear his application for an unfair dismissal remedy.
