Foodora to cease all Australia operations
Workplace Minister Craig Laundy:
“All businesses, including those in the gig economy, that treat workers as independent contractors must take great care to ensure that they have categorised those workers correctly.”
On August 2nd, Foodora announced its decision to leave the Australian market and cease operations by August 20.
Timeline of Foodora issues
March 2018: Unfair dismissal claims by two Foodora delivery riders claiming their dismissals were harsh, unjust and unreasonable. The union asked the Fair Work Commission (FWC) to apply the principles established in Hollis v Vabu Pty Ltd  HCA 44. In Hollis v Vabu, most of the High Court decided that a bicycle courier was an employee of the courier company that gave him the work. The case of Hollis v Vabu was significant because it demonstrated that irrespective of the contractual intentions of the parties, the Courts will look at the substance and totality of the arrangements in deciding contractor/employee status.
June 2018: The Fair Work Ombudsman (FWO) investigated and assessed three workers’ status against a 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.
July 2018: At a hearing in Sydney heard that when the standard multi-factorial test is applied to the facts of Josh Klooger’s relationship with Foodora Australia Pty Ltd, Mr Klooger is in fact an employee rather than an independent contractor. Mr Klooger “time-based” payments, presented to the public as a representative of the company and worked to rosters set by the company, during which he was expected to be available to perform deliveries.
August 2018: The German-based Foodora leaves the Australian market saying:
“We wish to express our gratitude to all of our customers, contractors and employees for their dedication to Foodora Australia, and for allowing us to be a part of their everyday. It has been a privilege to bring the food you love right to your door.”
Foodora’s defection leaves the June and July cases against the delivery company in limbo. In these cases, The Fair Work 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 superannuation contributions.
Do you see Foodora’s cessation as an admission of guilt? Are they anticipating a multitude of stolen wages by these ‘at-arms’ length contracts?
Workplace Minister Craig Laundy said:
“There are clear provisions in the Fair Work Act that protect against sham contracting and breaches of modern awards… sham contracting is a serious breach of Fair Work laws as it can result in workers being ripped off.