Gig economy gets green light to use contractors

Gig economy companies have been allowed to continue to classify their riders as independent contractors rather than full-fledged employees entitled to minimum wages and protections following a landmark court ruling. country work.

The decision underscores the federal government’s promise to legislate new rights for workers in the gig economy, a move the powerful Labor-aligned Transport Workers Union has said is “urgent”.

The Fair Work Commission on Wednesday overturned an earlier ruling that a Deliveroo rider, Diego Franco, was an employee and protected from wrongful dismissal. If the decision had stood, it would likely have forced Deliveroo to pay massive arrears to its passengers and upended the gig economy sector, which also includes companies such as Uber, DoorDash and Menulog.

Diego Franco initially won his wrongful dismissal case but a series of High Court rulings overturned it.Credit:Janie Barrett

While the commission concluded that “in reality” Franco’s work had the hallmarks of the job, three senior commissioners said they were bound to follow a recent High Court ruling that required them to “turn a blind eye on these issues” and to focus heavily on the terms of the contract between Franco and Deliveroo.

These conditions, which allowed Franco to be replaced by other riders, let him choose his own route to the customer and required him to provide his own vehicle, made him an entrepreneur. Companies such as Deliveroo and Uber, which declined to comment, use contractors who do not get traditional workers’ compensation or wrongful dismissal rights. They provide insurance for their riders.

Deliveroo and the Transport Workers Union, which represents Franco, said the decision showed why the federal government needed to reform the sector, as it had pledged to do.

“Deliveroo believes the time is right for the discussion to go beyond rider status,” a Deliveroo spokeswoman said. “It is now clear that our riders are genuinely engaged as independent entrepreneurs.”

She said Deliveroo riders could choose when, where and how long they wanted to work, which was only possible through self-employment.

“We are committed to working with the Federal Minister of Industrial Relations and all stakeholders to develop a national reform program tailored to the way riders choose to work,” the spokeswoman added.

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