The Classification of Employment in the ‘Gig’ Economy- the recent Deliveroo Case

In my Tort Law class, we spend a considerable amount of time talking about the employment status of workers. If you are not familiar with this area you might be wondering why this is of importance- I mean who cares if you are an employee or an independent contractor (or whatever) as long as you receive your pay at the end of the pay period!?!

Well the thing is it really does matter and can make a massive difference to your life…

It is becoming increasingly clear many of our workplaces are evolving.  Lots more people are working from home and the so-called ‘gig’ economy is expanding. One recent case which has considered how employment should be classified in this new’ gig’ economy relates to a Deliveroo driver who was allegedly unfairly dismissed. I just had a look at the ‘Deliveroo’ website…which I should add has made me extremely hungry for some high calorie food…‘Deliveroo’ promises to deliver foods to your door from your favourite restaurants and take away joints….yum!!!

Diego Franco, who delivered food on his motorbike for Deliveroo, brought an action (backed by the Transport Workers Union) against the company for unfair dismissal. Apparently, he had been taken off the platform after being allegedly late for a shift.

The management at ‘Deliveroo’ argued their delivery riders are independent contractors rather than employees.  They noted their riders are free to work for others and can decide when and for how long they want to work. They also noted that riders can delegate deliveries to others.

 As a general rule a number of indicia are looked at to determine what the employment status should be of a worker. It is not adequate to leave this to the complete discretion of the employer/principal as this may ultimately be unfair to the worker. One of the over-arching aspects which is looked at is control- ie how much control does the ‘boss’ have over the worker in terms of hours of work and other factors. Factors such as who pays the insurance and any tax liability is also considered.  

In this recent Deliveroo case, Fair Work Commissioner Ian Cambridge found Mr Franco was not an independent contractor. He found that he was an employee as he ‘was not carrying on a trade or business of his own or on his own behalf.’ In addition, the level of control Deliveroo exercised was conducive with an employment relationship. Cambridge noted Franco’s dismissal was ‘harsh, unjust and unreasonable.’ He ordered that Deliveroo reinstate his position and pay him lost wages.  

Apparently, there are serious safety concerns relating to the safety of riders in this sector. In fact, late last year 5 riders died whilst working in this industry. The Transport Workers Union national secretary Michael Kaine noted ‘the treatment of gig workers isn’t just unfair, it is deadly. Riders work under the spectre that they may get sacked at any moment and are forced to risk their lives to make deliveries quickly.’

Deliveroo are planning on appealing the decision. This will be fascinating to watch as there have been lots of tort law cases relating to determining the employment status of workers. One such case is Hollis v Vabu (2001) 207 CLR 21, which has very similar facts to the Deliveroo case. The difficulties of determining whether or not a worker is an employee or an independent contractor were very evident in the Vabu cases. In this series of cases the Trial Judge and the Court of Appeal decided the bicycle couriers were independent contractors. The High Court however, decided the couriers were employees!?!

Stay tuned for this developing situation……can you hear the excitement in my voice?!!!!