Australian court rules Deliveroo subjected worker to 'harsh, unjust and unreasonable' treatment

Australia’s Fair Work Commission ruled on Tuesday that a Deliveroo rider who was unfairly dismissed was an employee and not a contractor.

The decision was expected to have ramifications for the wider gig economy

The rider was sacked via email for being too slow during the height of the Covid-19 pandemic and was the subject of “harsh, unjust and unreasonable” treatment.

Deliveroo’s termination system “involved an entirely unjust and unreasonable process,” the court ruled.

Despite food delivery companies like Deliveroo or UberEats classing their workers as independent contractors, rather than employees, which exempt the company from giving award rates of pay, sick or annual leave or protections against dismissals, the Australian commission ruled the worker was in fact an employee due to the “level of control Deliveroo possessed” over him.

The rider, Diego Franco, had been working for Deliveroo for three years when he was sacked.

The commission found that Deliveroo regularly tracked its delivery riders and compared their times – known as a “rider experience time” – and used data analytics to identify slow deliverers.

On Tuesday, the Fair Work Commission ruled that this dismissal was “without valid reason”.

“The dismissal involved an entirely unjust and unreasonable process including the complete absence of any opportunity for Mr Franco to be heard before the decision to dismiss was made,” the commissioner said.

“The correct characterisation of the relationship between Mr Franco and Deliveroo is that of employee and employer … Mr Franco was not carrying on a trade or business of his own, or on his own behalf. Instead he was working in Deliveroo’s business as part of that business.

“The level of control that Deliveroo possessed [...] when properly comprehended, represented an indicium that strongly supported the existence of employment rather than independent contractor.”

In parallel, the head of the UK’s pension regulator called on gig economy companies such as Deliveroo to recognise the employment rights of those who work for them and set up workplace pensions.

Charles Counsell, the chief executive of the Pensions Regulator, said the government-backed body was already working closely with Uber on a workplace scheme.

“I am going to call on other organisations in the gig economy to start to recognise that the people who work for them are workers and should be eligible for a pension,” Counsell told the regulator’s TPR Talks podcast.

“It is all about helping people working in the economy to have a decent standard of living in retirement and I really encourage those in the gig economy to take a stance and start putting their workers into pensions. Lets not deal with this on a case-by-case basis."