The fair work ombudsman is chasing owed wages and benefits for three delivery riders for food delivery company Foodora, in a test case in the Federal Court of Australia about whether gig economy workers are actually employees of the companies they deliver for.
The ombudsman has alleged that Foodora misrepresented two bicycle riders in Melbourne and one delivery driver in Sydney as independent contractors in 2015 and 2016. The two riders were 19 at the time, and the driver was a 30-year-old Indian migrant who has since become an Australian permanent resident.
Although the three workers were required to get an Australian Business Number and sign a contract stating they were an "independent contractor", the fair work ombudsman has alleged that under the Fair Work Act, the riders were considered employees of Foodora, and thus were entitled to minimum wages and conditions.
This was because Foodora had some control over the workers' hours and location of work, and also required the workers to wear Foodora clothing and carry storage boxes. Rates of pay were also set by Foodora and were not negotiated by the workers, and the workers did not have their own business outside of working for Foodora.
The three workers are allegedly owed a total of $1,620.74 for a four-week period of work, most of which is for the Sydney driver, who worked longer hours.
The fair work ombudsman, Natalie James, has decided to target so-called sham contracting because it could offer an unfair competitive advantage to companies that use it as a business model.
"There has been broad community and academic debate about the status of 'models' using smartphone-driven technology as a means for deploying a workforce that delivers food to consumers from restaurants and fast food outlets," she said in a statement.
"The only way to answer the question of whether the workers delivering the meals are employees or ‘independent contractors’ is for someone to ask a court to consider the specific 'relationships' between a company and its workers.
“As the national workplace relations regulator, the Fair Work Ombudsman is now putting this question of significant public interest before a court to consider.”
In addition to paying back the owed wages, Foodora could face up to $54,000 in fines per contravention of the Fair Work Act.
A case management hearing will be held on July 10.
A spokesperson for Foodora said the company will be "defending the claims and accusations that have been made against the business."
The Transport Workers' Union is already taking up unfair dismissal cases against Foodora, due in court early next month. TWU national secretary Tony Sheldon welcomed the FWO taking up the case, but said it needed to be wider than just Foodora.
"All workers deserve the rights and protections that generations have fought hard for," he said in a statement. "The on-demand economy is a tired example of old-fashioned exploitation with tech billionaires reaping the benefits at the community’s expense."
The head of the Australian Council of Trade Unions, Sally McManus, has said so-called gig economy workers deserve to be treated as employees, and that the gig economy was taking workers' rights back 100 years.