Deliveroo appeal stalled as High Court ruling throws spanner in the works

Sep 29, 2021

Australian food delivery company Deliveroo is primed to reinvent our ‘gig economy’ by appealing a decision made by the Fair Work Commission. But recent High Court comments regarding employment and independent contractor relationships have caused confusion, prompting the FWC to ‘pump the brakes’ on the appeal.

The initial skirmish

In 2020, a dispute arose between Deliveroo and a driver that led to the termination of his supplier agreement with the company. The driver brought an unfair dismissal claim to the FWC (Diego Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818) on the basis that he was actually an employee, while Deliveroo claimed he was an independent contractor.

Despite the driver being engaged under a supplier agreement rather than an employment contract, the FWC found the driver was actually an employee.

In making its decision, the FWC looked at the relationship between Deliveroo and the driver as a whole rather than any specific terms or labels contained in the driver’s supplier agreement.

It found that Deliveroo’s high level of control over the driver’s work outweighed other factors normally associated with independent contracting.

Unhappy with the FWC ruling, Deliveroo appealed to the Appeal Bench of the FWC.

What’s happening now?

Separately, the High Court of Australia decided another case that might affect Deliveroo’s appeal outcome. The HC decision (WorkPac Pty Ltd v Rossato & Ors [2021] HCA 23) assessed Mr Rossato’s employment by looking at the terms of his employment contract rather than the ‘totality of the relationship’ – placing a newfound emphasis on the actual terms of a contract.

What does it mean for Deliveroo?

The FWC has delayed the Deliveroo appeal in anticipation of the High Court issuing more authoritative guidance in its upcoming cases.

If the High Court’s thinking in Rossato is upheld, companies like Deliveroo and Uber will likely be able to rely on their contracts to defeat claims that its agents are employees with rights to specific entitlements.

What does it mean for you?

These developments are a timely reminder to review your employment contracts and contractor relationships to make sure they reflect your intended arrangement. Until future High Court cases provide further clarity, employers should exercise extreme caution.

If you have any concerns about your employment contracts or want to chat about employment law generally, our team is here to help.