ATO investigation suggests Foodora has misclassified employees as sub-contractors, unfair dismissal case before FWC proceeds and FWO drops sham contracting prosecution
Following food delivery company Foodora’s announcement that it is pulling out of Australia, a leaked letter from the administrator Worrells’ letter to Foodora’s creditors reveals that the ATO has the view that the Foodora has misclassified delivery riders as independent contractors rather than employees.
The ATO is reportedly in the process of finalising an assessment for outstanding PAYG and superannuation along with penalties and interest against Foodora and Revenue NSW is pursuing unpaid payroll tax in accordance with the NSW Payroll Tax Act.
Meanwhile, the unfair dismissal case against Foodora is proceeding before the Fair Work Commission in Sydney tomorrow (13 September 2018). The TWU has confirmed that it would continue to run the case saying former Foodora delivery rider, Josh Klooger is owed about $47,000 in wages and entitlements. TWU national secretary Michael Kaine said “We’ve got to hold them to account .. If we don’t take this up and get a finding, it opens the door for them to come back and do the same thing or for other companies to take the same approach.”
The Fair Work Ombudsman has dropped a sham contracting case in the Federal Court which alleged that three former Foodora workers were employees rather than independent contractors. FW Ombudsman Sandra Parker has not made any comment on the reasons why the case has been dropped.