The Fair Work Ombudsman Natalie James launches a sham contracting prosecution against Foodora in the Federal Court. The Ombudsman has said that sham contracting is a priority for the agency as it has a direct impact on the individuals affected and gives an unfair competitive advantage to those businesses who misclassify workers as independent contractors when they are more appropriately described as being in an employment relationship.
The Ombudsman conducted an investigation and assessed the three workers’ status against the multi-factor test and found the following factors suggested they were more appropriately classified as Foodora employees:
- the level of control, supervision and direction Foodora exercised over the workers’ hours and location and manner of work;
- the requirement for the workers to wear a Foodora-branded t-shirt and use food storage boxes and/or bike racks supplied by Foodora;
- Foodora paying the workers fixed hourly rates and/or amounts per delivery and the workers did not negotiate their rates of pay at any time; and
- each of the workers was not genuinely conducting their own delivery business in that they did not advertise or promote their availability to perform deliveries to the public, did not delegate their delivery duties with Foodora to any other person and did not have their own customer base, business premises and insurances.
The Ombudsman alleges that the Fast Food Industry Award 2010 should apply and the workers were entitled to unpaid wages, casual loading, penalty rates for night, weekend and public holiday work and also superannuation contributions.
A case management hearing is scheduled for 10 July, 2018.