The Fair Work Commission (FWC) has found that a former Foodora rider was an employee (not an independent contractor) and was unfairly dismissed: Joshua Klooger v Foodora Pty Ltd [2018] FWC 6836. The decision is a significant decision for the status of the so called ‘gig economy’.

In previous rulings, the FWC has found that Uber drivers were not employees and therefore not subject to the Fair Work Act 2009 (Cth).

This decision comes against the background of the recent announcement of an inquiry by the Victorian Government into the gig economy and the adequacy of workplace laws in the sector.

The key to the employee / contractor distinction is invariably the intricacies of the relationship between the parties.

In applying the multifactorial test, the FWC in this decision highlighted the following:

• The offer and selection process for engagement occurred via the weekly access established by Foodora by way of the shifts app
• While the contract used the terminology of a principal and contractor, it contained many provisions ordinarily found in an employment contract
• Foodora had considerable capacity to control the manner in which the applicant performed the work
• The applicant did perform some limited work for other delivery companies at different times
• The applicant did not provide much equipment to perform the delivery work. The bicycle used for delivery work was used for non-work-related bicycle activities.
• Foodora presented the applicant to the world at large as an emanation of its business
• There were arrangements for shift or job swaps to occur, which were endorsed by the company. This factor suggested an independent contractor relationship.
• Foodora did not deduct income tax from the remuneration paid to the applicant
• The applicant was paid on a regular basis in respect of the completed shifts each week, but the applicant was not provided with holidays or sick leave.

Commissioner Cambridge found that despite the attempt by Foodora to create an independent contractor relationship, the applicant was working in the respondent’s business as part of that business and was an employee.

The decision is one of the first cases in which a person working within the gig economy have been found to be an employee. On the other hand, clearly the nature of the IT platform and the surrounding working arrangements will be paramount in any assessment. So for example, Uber and other similar companies have successfully argued that the drivers cannot be employees because the drivers are simply using Uber’s IT platform to find customers and provide ridesharing services; for example, the FWC decision of 11 May 2018 in Janaka Namal Pallage v Rasier Pacific Pty Ltd.

These decisions raise interesting issues for the future of work and the impact of technology in the workplace, particularly given that the Senate, in its Future of Work inquiry, has suggested that workplace laws should be reviewed to regulate the gig economy.

Businesses should continue to ‘watch this space’, as there is likely to be further decisions and potentially even legislative change.