In its unprecedented ruling, the Fair Work Commission (FWC) held that a former Foodora delivery rider (Applicant) was unfairly dismissed from employment, and was not an independent contractor as the food delivery company maintained.
Having been dismissed from Foodora via email without any warning (Dismissal), the Applicant sought relief from the FWC, claiming that he was:
- an employee, rather than an independent contractor; and
- accordingly unfairly dismissed.
Responding to the Applicant’s first argument, the FWC silenced Foodora, characterising the Applicant as an employee of the company. The fact that the Applicant was not carrying on a trade or business of its own, or on its own behalf, underpinned this finding.
In addressing the Applicant’s second claim, the FWC deemed the dismissal “plainly unjust, manifestly unreasonable, and unnecessarily harsh”. Accordingly, the Dismissal was characterised as:
- a dismissal from employment; and
- void of any valid reason founded upon misconduct or capacity.
The above, combined with Foodora’s failure to allow the Applicant an opportunity to respond to the Dismissal, conditioned the FWC’s finding that the Dismissal was harsh, unjust and unreasonable (as per s 387 Fair Work Act 2009 (Cth)).
Through improperly characterising the Applicant’s role as independent contractor, Foodora failed to afford the Applicant its due entitlements under the Fair Work Act. To account for this breach and the Dismissal, the FWC ordered that Foodora pay the Applicant $15,559 within 21 days.
What does this mean?
This decision highlights the need for businesses to accurately characterise and define independent contractors versus employers. Clearly, the parties’ description of the relationship is not sufficient, particularly because a court will look beyond mere contractual terms, and assess the characteristics that comprise the relationship.
As evident from this case, an employer who improperly characterises its employee will be in breach of the Fair Work Act, giving rise to liability.