Online delivery firm Foodora faces legal action over sham contracting activity

14th June 2018 (Last Updated June 14th, 2018 14:06)

Food delivery company Foodora Australia is facing a lawsuit for alleged involvement in sham contracting activity that lead to underpayment of three workers.

Online delivery firm Foodora faces legal action over sham contracting activity
Credit: Tiia Monto.

Food delivery company Foodora Australia is facing a lawsuit for alleged involvement in sham contracting activity that lead to underpayment of three workers.

The workers involved in the incident include two bicycle delivery riders in Melbourne and a delivery driver who used a car to deliver to customers in Sydney.

Fair Work Ombudsman conducted an investigation using the multi-factor test to identify whether the workers were employees entitled to minimum wage and conditions under the Fair Work Act were met.

The agency found that Foodora paid fixed hourly rates and amounts per delivery and asked workers to wear a Foodora-branded t-shirt and use food storage boxes and bike racks for delivery.

“The Fair Work Ombudsman is now putting this question of significant public interest before a court to consider.”

The level of control, supervision and direction by Foodora on these workers classifies them as the company’s workers rather than contract employees.

Following an investigation, the Fair Work Ombudsman has sued the food delivery company in the Federal Court alleging that it has committed several breaches of the Fair Work Act.

Fair Work Ombudsman Natalie James said: “Relevant to the decision to litigate in this case is the extent to which contracting arrangements are utilised by this significant business.

“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.

“As the national workplace relations regulator, the Fair Work Ombudsman is now putting this question of significant public interest before a court to consider.”

The government agency has scheduled a case management hearing in Sydney’s Federal Court on 10 July this year and is seeking a court order for Foodora to back-pay the workers in full and make superannuation contributions on their behalf.