Fair Work Commissioner Ian Cambridge has found that the relationship between Foodora rider Josh Klooger and Foodora was one of employee and employer, and that Klooger was due $15,559 in compensation for his unfair dismissal in lieu of reinstatement.
Commissioner Cambridge found that after applying the multifactorial test “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].”
The Commissioner 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.”
In relation to the unfair dismissal, Commissioner Cambridge found that that the applicant’s dismissal was “firstly, a dismissal from employment, and secondly, without valid reason involving established misconduct or capacity inadequacy.” The Commissioner found further that “the dismissal involved an entirely unjust and unreasonable process including the complete absence of any opportunity for [Klooger] to be heard before the decision to dismiss was made.”
Commissioner Cambridge found that the dismissal was harsh, unjust and unreasonable, and that Klooger had established his right to a claim for unfair dismissal.
The Foodora decision is significant in that the claim by gig economy platform owners that their workers are engaged as independent contractors rather than employees has now been challenged using the multifactorial test and this could extend to others using similar platforms to avoid their employment obligations. Two previous rulings in relation to Uber drivers found that drivers were not employees so this decision establishes new case law in the area.