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Fair Work Commission decision favours Deliveroo over delivery worker

13 September 2022

The recent Fair Work Commission (FWC) decision in Deliveroo Australia Pty Ltd v Franco, Diego [2022] FWCFB 156 highlights the importance of clearly identifying the type of working relationship between an organisation and a worker in a written agreement.

Why was this case different?

In deciding whether a worker is an employee or an independent contractor, Australian courts previously considered evidence of what actually occurred in the working relationship (which may have differed from what was in a written agreement between the parties).

In February, two High Court decisions took a different approach by relying on the terms of a written agreement to determine the worker relationship. This approach has now been followed by the FWC.

What did the Fair Work Commission consider?

In the Deliveroo case, the FWC relied on four aspects of the agreement terms between Mr Franco and Deliveroo to conclude that Mr Franco was an independent contractor and not an employee:

  • Deliveroo lacked control over the way Mr Franco performed the work he agreed to do
  • Mr Franco had to provide a delivery vehicle at his expense
  • the agreement didn’t require personal services from Mr Franco (he had the right to arrange for someone else to perform the services he agreed to provide), and
  • Mr Franco was required to pay an administrative fee to Deliveroo (for access to software and for administrative services)

Following the recent High Court decisions, because there was a written agreement in place between Deliveroo and Mr Franco, the FWC was obliged to ignore evidence of the working relationship in practice between the parties. This included evidence that:

  • in practice, Deliveroo had a significant degree of operational control over its delivery workers, including Mr Franco
  • Deliveroo strongly encouraged Mr Franco to wear Deliveroo-branded merchandise, which Mr Franco did when he performed Deliveroo business
  • in practice, Mr Franco was expected to provide services under the agreement personally, and
  • Deliveroo, over time, varied the terms of its agreement with Mr Franco (without any negotiation or consultation), apparently to remove any indication that Deliveroo could control the performance of the work and maintain Deliveroo’s position that the delivery workers were contractors and not employees

What are the implications of this decision?

Because the FWC found Mr Franco was an independent contractor and not an employee, he was not protected from unfair dismissal under the Fair Work Act 2009 (Cth) and could seek no remedy from the FWC for what was – in the words of the Commissioners deciding the matter - ‘plainly … unfair treatment on the part of Deliveroo’.

What does this mean for your not-for-profit?

It is important for not-for-profit organisations to consider how to distinguish between an employee, independent contractor and volunteer, and know why the distinction is important

You can find out more about employment law by taking a look at our free resources.