By Jack de Flamingh and Sophie Hopkins -
Snapshot
- The character of a work relationship will be determined by the rights and obligations of the parties as set out in a written contract.
- The bar – to go behind the terms of the contract – and establish a sham contract, is very high.
- Most gig economy workers will remain on the outside of the Fair Work Act protections – for now.
In the recent decision of Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156, the Full Bench of the Fair Work Commission confirmed the key consideration in determining whether a relationship is one of employment or independent contractor is the contractual rights and obligations of the parties. In so doing, the Full Bench applied the High Court decisions in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 398 ALR 404; [2022] HCA 1 (‘Personnel Contracting’) and ZG Operations Pty Ltd v Jamsek (2022) 398 ALR 603; [2022] HCA 2 (‘Jamsek’).
The Full Bench took the unusual step of expressing ‘regret‘ that there was no remedy available to Mr Franco in the Fair Work Commission, seemingly in support of legislative changes that may expand its role to regulate the gig economy.
Background
Deliveroo is a well-known food and drink delivery service. Customers place orders through the Deliveroo customer smartphone application which then assigns a delivery rider.
Mr Franco worked for Deliveroo as a delivery rider under successive agreements with Deliveroo signed in 2017, 2018 and 2019. In April 2020, Mr Franco was identified by Deliveroo as a rider with delayed delivery times. Deliveroo advised Mr Franco that because he had failed to deliver orders within a reasonable time, he was in breach of the agreement with Deliveroo and the agreement would be terminated. Subsequently, Mr Franco’s access to the Deliveroo rider application was disabled. Mr Franco brought an unfair dismissal application in the Fair Work Commission.
At first instance, Mr Franco was successful. Commissioner Cambridge held that Mr Franco was an employee and protected by the unfair dismissal regime. Commissioner Cambridge considered the question of whether Mr Franco was an employee or an independent contractor by looking at the working relationship as a whole and applying the multifactorial test in accordance with the principles set out in Hollis v Vabu Pty Ltd [2001] HCA 44. Commissioner Cambridge concluded Mr Franco was unfairly dismissed.
