Foodora administrators Worrells has announced that workers who made a claim for unpaid entitlements will be paid 29 cents in the dollar toward unpaid wages and superannuation.
The $3 million “comfort offer” from Berlin-based parent company Delivery Hero totals around $2.3 million and covers around 30 per cent of the entitlements claimed by 1,700 workers – 3,800 workers did not make claims and will remain unpaid. The riders will have to pay tax on the monies paid by Hero Direct. The ATO is also owed more than $2 million in unpaid payroll tax due as a result of the workers having been misclassified as contractors rather than employees.
The settlement offer follows a decision by the Fair Work Commission that found Josh Klooger to be an employee after applying the multifactorial test. The Commissioner found “the applicant was not carrying on a trade or business of his own, or on his own behalf” and the relationship was “not an independent operation .. despite the attempt to create the existence of an independent contractor arrangement [by Foodora].”
Commissioner Cambridge found that “Foodora stipulated the requirement for individuals to obtain an Australian Business Number and [attempted] to create, at least the appearance, that the individual operate[d] a business of their own. The corporation then avoid[ed] the many responsibilities and obligations that it would normally have as an employer. The responsibility for compliance with many important regulatory obligations including but not limited to taxation, public liability insurance, workers compensation insurance, statutory superannuation, licensing and work health and safety, is transferred from the corporation to the putative contractor.”
Professionals Australia has recently highlighted the urgent need for regulation of the gig economy in a submission to a Victorian Inquiry into the On Demand Workforce.