New Modern Award not on the menu for Menulog

Food delivery riders and drivers must be paid under the same rules as other truck and van couriers, in a ruling by the Fair Work Commission, though it only applies to workers who are employed rather than the contractor workforce of companies like Uber and Deliveroo.

This decision has dealt a blow to delivery giant Menulog, who last year made the decision that it wanted to employ many of its riders rather than engage its workers as independent contractors.

Application by Menulog

On 24 June 2021, Menulog made an application to the Fair Work Commission for a new On Demand Delivery Industry Award (“On Demand Award”). Menulog argued that none of Australia’s 120-odd sets of industry minimum pay and conditions rules specifically covered the gig economy industry. The delivery company submitted that it would require a new, dedicated set of pay rules in order to employ its riders on a large scale.

Submissions from TWU

Despite the Transport Workers Union (“TWU”) supporting Menulog in their efforts to do “the right thing”, the delivery giant nonetheless faced opposition from the Union in its attempt to create their new specialised gig economy On Demand Award.

The TWU argued that there was no need for the creation of this new On Demand Award, but rather, Menulog’s operations were already covered by the road transport award, describing the work controlled by it and the likes of Uber and Deliveroo as analogous to “and an outgrowth of” courier work.

Fair Work Commission Decision

On Friday 28 January 2022, the Fair Work Commission ruled against the creation of the new award and held that the Road Transport Award, which governs many truck drivers, applies.

The effect of the benches ruling has resulted in the Menulog employees currently engaged under the Miscellaneous Award being shifted to the Road Transport Award – which features minimum rates of pay in excess of $1 per hour more.

The TWU celebrated the ruling as a win for delivery riders and its members, saying in a press statement that the decision was a “monumental leap forward in the industry”.

“Threshold Issue” for new Award

The Full Bench identified a “threshold” issue on Friday, noting that with respect to industry coverage, the “central element” of Menulog’s proposal was that it was involved in “the collection and delivery of food, beverages, goods or any other item”.

“We consider that the business activity referred to clearly falls within that part of the definition of ‘road transport and distribution industry’ in clause 4.2(a) of the Road Transport Award.

The Full Bench held that the proposed definition of ‘collection and delivery’ by road in the proposed gig-economy agreement was substantively the same as ‘transport by road’ in the Award. Similarly, the proposed definition of ‘food, beverages, goods or any other item’ in the proposed definition was held to fall comfortably within the Award’s ‘goods, wares, merchandise, material or anything whatsoever…’ etc. in clause 4.2(a).”

This decision of the coverage of the Road Transport Award constitutes a significant set back for Menulog in their attempt to create what is considered one of the world’s first gig-economy specific enterprise agreements.

Delivered Food is Captured as “Saleable Goods”

Menulog’s argument that the Award does not capture delivery services because it does not specifically include prepared meals was rejected by the Full Bench. The Full Bench favored a broad definition of “goods” in its approach, applying the broad test for “goods” in determining whether or not it was “saleable” as being the qualifying criteria.

The Full Bench referenced amusing past cases from eels to coins which were ultimately held to be classified as “goods”. Therefore, they held that the definition extended to meals prepared for sale and home delivery.

“Even if prepared meals did not constitute ‘goods’, they would clearly fall within the words ‘…anything whatsoever…’ etc. in clause 4.2(a), which appear to us to be drafted as a ‘catch-all’,” the bench said.

“We therefore conclude that the ‘on demand delivery services industry’, as defined by Menulog, would comfortably fall within that part of the definition of the ‘road transport and distribution industry’ contained in clause 4.2(a) of the Road Transport Award.

“It also necessarily follows from this conclusion that the Miscellaneous Award does not cover them by reason of clause 4.1 of that award.”

As a result of this finding, the bench said the next step was to consider whether folding on-demand employers and employees under the road transport award meets the Fair Work Act’s modern award objectives.

Future

This ruling is not the final outcome for Menulog. There is still an opportunity to try to convince the Fair Work Commission that a new industry award would work better than Road Transport Award, or alternatively, negotiate with the Transport Workers Union on other changes.

Menulog has reaffirmed its commitment to, “finding avenues for offering employment of couriers in a long-term sustainable fashion”, in the wake of this decision.

If you have any questions in relation classification of independent contractors vs employees, or the interaction of employment law with the gig-economy currently, please do not hesitate to contact Nick Stevens, Luke Maroney, Daphne Klianis or Josh Hoggett.