Contractor or Employee? Deliveroo Loses Test Case in Fair Work Commission's Gig Economy Ruling

The Fair Work Commission has found that a Deliveroo rider who had their supplier agreement terminated via email was in fact an employee and was entitled to protection from unfair dismissal. The rider, Diego Franco, had been working for the delivery platform for three years when Deliveroo terminated his engagement due to his slow deliveries.

Commissioner Ian Cambridge rejected the Company's arguments that Franco was an independent contractor and found that he was in fact an employee. The decision was largely based upon the control the company had over Franco, that Deliveroo monitored his performance, and that Deliveroo collected data about his performance and delivery times which it could use to exercise control over his work.

In addition to this, Franco's status as an employee was also determined in consideration of his capacity to delegate work, the terms of the supplier agreement and entitlements, pay arrangements and branding. Overall, Commissioner Cambridge found that it was clear that Mr Franco was not running his own business but working as part of Deliveroo's business. Mr Franco's unfair dismissal claim was successful and he was reinstated to his position with Deliveroo. Deliveroo has stated that they intend to appeal the decision, to 'protect [the] freedoms' of riders to remain self-employed.

‍Key Takeaways

• the ability to control a worker's work remains a significant consideration when deciding whether a worker is properly characterised as an employee or an independent contractor;
• that a worker can work elsewhere, including for a direct competitor is not determinative as to whether they are an employee or contractor; and
• the courts will continue to grapple with new emerging ways of working and whether they fit within traditional concepts of employment and contracting.

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