Driver delivers surprise verdict to Deliveroo

By Robert Lamb, Director & Caitlyn Wessels, Lawyer at Hillhouse Legal Partners
| 5 min. read

Key takeaways

  • The Fair Work Commission has made a landmark ruling that found a Deliveroo rider who had their supplier agreement terminated was in fact an employee and therefore entitled to protection from unfair dismissal.
  • The Commission considered the ‘multifactorial’ approach when assessing the case and ruled there was no valid reason for the dismissal and termination of the driver’s services without proper warning.
  • The ground that gig-economies stand on is becoming very shaky, and this decision may soon extend to other industries and the engagement of independent contractors.

In a very recent Fair Work Commission Case, it has been found that the Deliveroo Driver in an unfair dismissal claim context was an employee not an independent contractor contrary to the supply agreement drafted by Deliveroo through the Deliveroo rider app.

The Deliveroo driver had worked for Deliveroo for 3 years. He was inducted according to their system and also worked for Uber Eats and Door Dash.

He was given warnings by Deliveroo and an investigation by Deliveroo found that the driver had, in Deliveroo’s view, significantly delayed delivery times.  Ultimately Deliveroo found that the driver’s times were unacceptably delayed and his supply agreement was terminated.

The driver unsuccessfully sought to persuade Deliveroo to reconsider their position and they terminated his supply agreement and blocked his access to the Deliveroo app and platform.

The driver commenced unfair dismissal proceedings in the Fair Work Commission seeking reinstatement, continuity of service and backpay. 

Deliveroo argued that the driver was an independent contractor not an employee and therefore could not bring an unfair dismissal case.

The Commission considered the ‘multifactorial’ approach when assessing the case and noted:

  • In respect of ‘control’ over the driver’s work, while the driver was not under any obligation to actually perform work for Deliveroo, Deliveroo could exercise significant control over where and for how long he worked if he chose to do so;
  • Deliveroo expressly permitted the driver to work for competitors, and he did provide his services to Uber Eats and Door Dash. The Commission considered this factor should not be construed as preventing an employment relationship;
  • The evidence established that the driver had no capacity to negotiate any terms of the agreement and given the that contract was presented on a "take-it-or-leave-it" basis reduced the weight was given to its terms;
  • Whilst the driver provided his own motorcycle and smartphone he was expected to (and did) wear Deliveroo branded attire and equipment;
  • Whilst the driver could theoretically delegate his work, in practice he could not as that would result in him not earning a proper wage;
  • Deliveroo used recorded time and dates for each of the driver’s deliveries to produce invoices upon which it paid him; and
  • Deliveroo did not deduct income tax and the driver did not receive any leave entitlements.

On balance, the Commission found the engagement was one of employment and found that there was no valid reason for the dismissal and termination of the driver’s services without proper warning. The dismissal was held to be unjust, unreasonable and harsh, and reinstatement was ordered.

Interestingly, the Commission made comments regarding these type of cases involving gig economy players:

  • In respect of ‘control’, what might have superficially appeared to be an absence of control over the driver’s work actually camouflaged the significant capacity for control that Deliveroo (like other digital platform companies) possesses.
  • The mere fact that Deliveroo expressly permitted the driver to work for competitors was not sufficient by itself to prevent an employment relationship;
  • Contracts presented on a take-it-or-leave-it basis or where a person in the driver’s positon had no ability to negotiate might impact on the weight the Commission gives to their terms.

Again, this case proves that this is a very complex area of the law and each case is different and turns on its own facts. The ground that gig-economies stand on is becoming very shaky, and this decision may soon extend to other industries and the engagement of independent contractors.

We have been advising clients on this area of the law for more than 30 years and can advise businesses as to their legal rights and obligations under existing or new arrangements and also advise businesses on how to best engage employees or contractors.

Please get in touch if you would like to know more or have any queries. We are here to help.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.