Fair Work Ombudsman court case against ‘gig’ economy operator

The so-called ‘gig economy’ refers to temporary work opportunities, usually on a contract or freelance basis. Technology has facilitated a relative explosion in the number of gig economy opportunities for individuals to earn a living.

The Fair Work Ombudsman (FWO) raised concerns about the suggestion three ‘independent contractors’ working with Foodora Australia Pty Ltd were actually thator rather, more genuinely ‘employees’ entitled to minimum payment and conditions spelt out in the Fair Work Act.

The FWO office applied the multi-factor employee versus contractor test and found that the workers were actually employees due to several factors, including:

  • The level of control, supervision and direction, Foodora imposed on the workers;
  • The fact that the workers were required to wear a Foodora branded uniform
  • Foodora supplied tools and equipment as well as storage to the workers for completion of the tasks they were paid for;
  • The workers did not have any influence on the amounts they were paid for tasks completed;
  • The workers did not advertise their services externally, did not delegate services or hold their own client base or insurances.

The FWO has commenced legal action against Foodora in the Federal Court as having engaged in ‘sham contracting’ that has meant workers have been underpaid.   If the findings of the FWO are supported by the Court as a result of the current legal action, there will be significant implications not only for the 'gig economy' but also for industries where the use of 'independent contractors' is commonplace.  This would include building and construction, cleaning, couriers, security and road freight transport industries that have already been identified by the ATO as high risk industries for non-compliance and the use of contractors is extensive.

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Fair Work Ombudsman commences legal action against Foodora