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Deliveroo decision is NOT a win for unions. Just normal stuff!

Sunday, May 23, 2021

There’s a lot of excitement coming from the union movement over the recent ‘Deliveroo’ decision. ‘This is the end of gig’ they say.

They are excited because the Fair Work Commission (FWC) has declared that Deliveroo food deliverers are employees and not independent contractors.

However there’s nothing at all unusual about the decision. In 2018, a similar company to Deliveroo, the German-based Foodora, left Australia after its delivery people were declared to be employees. Conversely, in April 2020, Uber Eats delivery people were found to be independent contractors not employees.

You might ask, ‘is there some inconsistency here?’ Well, no! In fact the FWC (and the courts) are being entirely consistent. What the law requires is the application of the standard common law tests to distinguish an employee from a self-employed person.

The process involves considering up to about 20 or more factors such as: Did the worker have to work certain times? Was the worker ‘required’ to work? How was the worker paid? The task at law is to look at all the factors and give an overall assessment.

Even though Foodora, Deliveroo and Uber Eats appear to do the same thing—organise riders to collect food from restaurants and deliver the food to customers at home—in fact they each have different contracts and manage the process differently. That’s why the rulings differ.

I’ve examined both the Deliveroo and the Uber contracts. I’m not surprised by the Deliveroo decision. There are major operational differences between the companies. The fact is that the Deliveroo decision supports the legitimacy of the gig economy.

In 2006, Federal legislation secured across the country the ‘common law’ test for employee vs contractor determinations. The Independent Contractors Act followed on from a 2006 International Labour Organisation declaration which secured the right of people to be self-employed. Australia is a signatory to that international obligation.

Further, Australia has done more than any country to protect and defend self-employed people.

The Independent Contractors Act has unfair contract provisions. In addition, we have specific Federal unfair contract laws for small business people that are currently being ‘beefed up’. Then there are the current moves to create pay-on-time laws for small business people. The JobKeeper and JobSeeker benefits were made immediately available to self-employed people during 2020.

At the same time, there is no tolerance for sham contracting, with specific laws against that practice.

These Australian protections for self-employed independent contractors are world-leading.

But this regime that protects the right to be self-employed is hated by Australian unions and labour in general. They run scam media plays trying to boost the argument that self-employment is on the way out.

This ‘we hate independent workers’ movement is deeply embedded in Australian Labor.

The Victorian government is proceeding with an agenda to kill off self-employment. But Victorian Labor’s plan is confronted by the Independent Contractors Act which overrides state laws on the issue. This then explains the hype around the (very normal) Deliveroo decision.

Labor is eager to turn ‘gig’ into an election issue. But it’s up against the most advanced package of self-employment protections in the world. Labor’s agenda threatens those protections.


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