Deliveroo decision creates chaos in the ‘Gig Economy’ as law struggles to keep up
Everyone secretly loves observing chaos (as long as they are not in it). That’s why people slow down to look at car accidents.
Up until recently, businesses have relied upon ‘gig’ workers being able to be classified as independent contractors due to working for a number of platforms at the same time and have avoided paying employee related entitlements.
The recent Deliveroo decision (see below) means businesses should proceed with caution when assessing whether or not to engage independent contractors.
Recent decision for all businesses to be aware of- Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818 (‘Deliveroo’)
This recent decision has revealed division in the Fair Work Commission as it contradicts a 2020 full bench decision which found that Ubereats drivers are not employees.
How the Deliveroo decision impacts businesses?
Gig workers have been at the centre of the employee vs contractor debate for some time now.
Business owners have a history of classifying workers as contractors to avoid paying employee entitlements and protection under unfair dismissal legislation.
Although, Deliveroo will appeal this decision it is prudent for all companies who employ ‘gig’ workers to look at the ‘complete picture’ in determining whether or not there is an employment or a true independent contractor relationship.
Factors to consider when assessing whether or not a ‘gig’ worker is an employee or independent contractor
- Is the ‘gig’ worker carrying on a trade or business of their own/have their own ABN?
- Is it the ‘gig’ workers primary source of income?
- Who has control over when and how the work is performed?
- Does the worker have to wear a uniform?
- Does the business measure or monitor the worker’s performance?
- Can the worker subcontract work?
These are just some of the many factors an employer, director or business owner should consider when determining whether or not there is an employment or contractor relationship.
Hefty penalties apply to businesses who incorrectly classify employees as contractors – $13,320 for individuals and $66,600 for corporations per contravention.
There is no doubt that the law is unclear and has struggled to evolve as career opportunities move away from more traditional employment.
This ambiguity will inevitably be dealt with by the High Court but in the meantime please do not hesitate to contact our employment team if your business is uncertain as to whether your workers or suppliers are contractors or casual employees.
