The recent case of Diego Franco v Deliveroo Australia Pty Ltd  FWC 2818 concluded that a delivery driver was an employee of Deliveroo and not an independent contractor. The decision adds to the existing body of law regarding the factors which indicate the existence or absence of an employment relationship, particularly in respect of delivery drivers who contract with business through applications. To that end, the decision creates somewhat anomalous outcomes in this context.
In the Fair Work Commission, Mr Franco argued that he had been unfairly dismissed by Deliveroo. The Commission was required to determine the jurisdictional issue of whether Mr Franco was an employee of Deliveroo for the purposes of unfair dismissal protections. Thus, the Commission analysed whether Mr Franco, in his role as a delivery driver, was an employee or independent contractor or Deliveroo.
In determining whether Mr Franco was an employee or independent contractor, the Commission analysed multiple factors of Deliveroo’s relationship with its delivery drivers, some of which are considered below.
The Commission found that the level of control which Deliveroo was capable of exercising over Mr Franco as a delivery driver indicated that the relationship between Deliveroo and Mr Franco was one of employment.1 The Commission found Deliveroo’s capacity to control Mr Franco as an employee, largely centred on Deliveroo’s use of an electronic engagement system. The system was used to measure the performance of drivers against different metrics such as each driver’s rate of attendances, number of late cancellations, and availability to engage during busy periods.
The system also required drivers to book engagement shifts and provided drivers, who had satisfied performance metrics, engagements at more favourable times. The Commission found that the supervision of Deliveroo drivers under this system compelled drivers to have a specific kind of availability, to work at specific times, and to adhere to specific behaviours such as refraining from cancelling engagements. Additionally, the Commission note that Deliveroo’s ability to dismiss Mr Franco when he did not perform his duties to a satisfactory condition as a Deliveroo driver, also constituted a way in which Deliveroo could exercise control over its drivers. These factors led the Commission to decide that Deliveroo had the capacity to exercise ‘significant’ control over its delivery drives,2 which indicated a relationship of employment existed between the two parties.
The Commission held that even though Deliveroo allowed Mr Franco to work for the competitors of Deliveroo, this did not necessarily prevent Mr Franco from being an employee of Deliveroo.3 The Commission noted that ‘multi-apping’, where drivers work for multiple delivery companies which conduct their business through apps, is prevalent in today’s employment market. Thus, the Commission found that evidence of an individual ‘multi-apping’ alone cannot be construed as preventing a relationship of employment from existing.
Terms of the agreement
The terms of the agreement between Deliveroo and its drivers did intend to establish that drivers were independent contractors and that Deliveroo acted solely as principal of the drivers. However, the Commission held that the terms of the agreement needed to be read in reference to the circumstances on which drivers contracted with Deliveroo.4 For example, the Commission highlighted that Deliveroo drivers, like Mr Franco, did not have equal bargaining power to Deliveroo, that Deliveroo unilaterally dictated the terms of the agreement, and terms in the agreement mirrored those often found in standard employment contracts. Thus, the context in which drivers accepted Deliveroo contracts mirrored the context in which employment relationships usually form.
This reasoning should be uncontroversial given the classical pronouncement on sham employment arrangements, namely that “parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.” The issue of whether or not a person is an employee has always been a matter of substance over form.
Provision of equipment
The Commission found that although Mr Franco provided his own equipment required to perform his duties, such as a motorcycle and mobile phone, these were items Mr Franco otherwise possessed for his personal use. Thus, there was no evidence that Mr Franco had invested in equipment specifically needed for his duties in the same way as one would expect of an independent contractor.5
Mr Franco was not required to personally perform his duties as he was not personally assigned tasks by the company. Consequently, it was acceptable for other drivers to perform the duties of Mr Franco for Deliveroo. However, much like ‘multi-apping’, the Commission found that circumstances in which workers are entitled to swap shifts or duties are increasingly becoming a common aspect of employment relationships. Therefore, the sole fact that other works could have performed the duties of Mr Franco did not displace that an employment relationship existed.6
Presentation and uniform
The Commission found that Deliveroo expected drivers to dress in clothing and use equipment that bore the Deliveroo brand, an obligation with which Mr Franco complied. This aspect ultimately also contributed to the Commission’s finding that a relationship of employment did exist between Deliveroo and Mr Franco.7
Conclusion – Diego
The Commission held in Diego that Mr Franco, a Deliveroo driver, was an employee of Deliveroo by drawing on the ‘complete picture’ of Mr Franco’s relationship with Deliveroo.8 The Commission specifically noted that the level of control Deliveroo was able to exercise over Mr Franco, as to when and to what standards his tasks were performed, supported the finding that a relationship of employment existed.9
Related Commission decisions
The decision by the Commission in Diego is arguably somewhat at odds with the decision made by the Commission a year earlier in Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd t/a Uber Eats  FWCFB 1698. In Amita, the Commission found that Ms Gupta was engaged to perform delivery services for the company which supplied the ‘Uber Driver’ app, Portier Pacific, as opposed to Uber Eats. This was the result of the Commission analysing the unique business model of Uber Eats, the terms of the service agreement to which Mr Gupta was a party, and the fact that Portier Pacific was in control of Ms Gupta’s payment for her delivery services.
The Commission then determined that Ms Gupta was not an employee of Portier Pacific. It was held that key factors which point to a relationship of employment were absent. For example. Ms Gupta was not required to work at specific times, was not prohibited from working for other companies, and was not required to present the company’s brand when conducting her duties.10 Interestingly, the Commission did not expressly state that Ms Gupta was an independent contractor, but rather, simply decided that in all the circumstances, Ms Gupta was not an employee.
The Commission, in attempting to characterise the nature of the relationship between app-based companies and delivery drivers, had produced arguably inconsistent findings. As it stands, there is no specific ruling as to whether delivery drivers who contract with businesses through applications are employees or independent contractors and each case turns on its own facts.
Further, the decision in Diego leaves open the possibility of a ‘multi-apping’ delivery driver being an employee of more than one delivery company, if each company exercises a sufficient degree of control over the driver.
Finally, having regard to the critical issue in these matters of substance over form, employers should also keep in mind the civil remedy provisions in the Fair Work Act 2009 (Cth) regarding sham arrangements and misrepresenting employment as an independent contracting arrangement.
- Diego Franco v Deliveroo Australia Pty Ltd  FWC 2818, -.
- Ibid .
- Ibid -.
- Ibid -.
- Ibid -.
- Ibid -.
- Ibid .
- Ibid .
- Ibid -.
- Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd t/a Uber Eats  FWCFV 1698, -.