Employment status of gig workers: Deliveroo Australia Pty Ltd v Diego Franco

In a significant decision on the employment status of gig workers, a Fair Work Commission (FWC) full bench has quashed a ruling from last year that found a Deliveroo rider to be an employee.

Background

In May 2021, a FWC tribunal found that Deliveroo rider Diego Franco was an employee and not a contractor and therefore eligible to protection from unfair dismissal.

This was a landmark decision at the time and was anticipated to greatly impact the gig economy, with the Transport Worker Union stating that it had “huge implications for gig workers in Australia”.

Since this initial finding in May 2021, the High Court decision in Construction, Forestry, Maritime, Mining And Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations & Anor V Jamsek & Ors [2022] HCA 2 (Personnel and Jamsek) was handed down. Personnel and Jamsek was significant because it confirmed that the terms of written contracts have authority in determining the nature of workplace relationships between parties.

The Case

Deliveroo Australia appealed the decision made in May 2021, arguing that Diego Franco was a contractor.

Given the decision in Personnel and Jamsek, it was required to focus on the contractual rights and obligations of the parties under Deliveroo’s Supplier Agreement rather than undertaking a broader assessment of how the relationship between Deliveroo and Mr Franco operated in practice. 

In assessing, these contractual obligations, the full bench found that Mr Franco’s relationship with Deliveroo was that of a contractor and not an employee.

As such, Deliveroo delivery riders are not entitled to award rates of pay, sick or annual leave, or protections against unfair dismissal.

The Takeaway

This ruling has demonstrated the application of the case of Personnel and Jamsek and has emphasized the importance of employment contracts in defining whether a worker is a contractor or employee.

Employers should take this into consideration when drafting employment contracts for their employees and contractors to ensure their legal statuses are properly defined.

For assistance in drafting employment contracts, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett.