| [2018] FWC 6836 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Joshua Klooger
v
Foodora Australia Pty Ltd
(U2018/2625)
COMMISSIONER CAMBRIDGE |
SYDNEY, 16 NOVEMBER 2018 |
Unfair dismissal - contractor or employee - no valid reason - absence of procedural fairness - compensation Ordered.
[1] This Decision involves an application for unfair dismissal remedy which has been made under section 394 of the Fair Work Act 2009 (the Act). The application was made by Joshua Allan Klooger (the applicant). The respondent has been identified to be Foodora Australia Pty Ltd ABN: 50 605 948 052 (the respondent or Foodora).
[2] The application was filed on 14 March 2018, and it indicated that the date of the applicant’s dismissal was 2 March 2018. Consequently the application was made within the 21 day time limit prescribed by subsection 394 (2) (a) of the Act.
[3] The applicant has been represented by the Transport Workers’ Union of Australia (TWU), and Foodora filed a Form F3 – Employer Response to Unfair Dismissal Claim, which indicated that it was represented by Clayton Utz, lawyers. The Form F3 identified a jurisdictional objection to the application on the basis that the applicant was not an employee of Foodora but at all relevant times, an independent contractor.
[4] On 13 April 2018, conciliation of the matter occurred but the claim for unfair dismissal remedy was not resolved. On 7 May 2018, the Fair Work Commission (the Commission) conducted a Pre-Hearing Conference during which Foodora maintained its jurisdictional objection to the application on the basis that the applicant was not an employee.
[5] At the Pre-Hearing Conference, the Commission issued Directions for evidence and other material to be filed and served in preparation for a Hearing to deal with both the jurisdictional objection raised by Foodora and the substantive claim. Subsequently, the Hearing of the matter has been conducted in Sydney, over three days 3 July, 11 and 12 October 2018.
[6] At the Hearing, the Parties were granted permission, pursuant to s. 596 of the Act, to be represented by lawyers or paid agents. Mr M Gibian, Senior Counsel, appeared for the applicant. Mr Gibian called the applicant as the only witness to provide evidence in support of the unfair dismissal claim. Mr J Darams, Counsel, appeared for Foodora at the Hearing. Mr Darams called two witnesses who provided evidence on behalf of Foodora, one of whom provided her evidence via video link with Munich, Germany.
[7] The applicant commenced performing work for Foodora on 11 March 2016. The applicant performed work as a Corporate Rider (delivery rider) in accordance with a signed contract document (the service contract or agreement) which was titled “INDEPENDENT CONTRACTOR AGREEMENT” and stipulated that the applicant had been engaged as an independent contractor and not an employee. The service contract established, inter alia, that the applicant was to be paid a rate of $14.00 per hour for each hour that he was engaged, plus $5.00 was paid to the applicant in respect of each delivery that he performed. The service contract document was a standard format document which, with minor alterations, was used to record the fundamental terms of engagement for the applicant and other individuals engaged by Foodora to perform delivery work.
[8] The work performed by the applicant was arranged and undertaken by means of various computer-based applications or apps, which were accessed via the use of smart phones and/or other mobile electronic devices. The fundamental arrangements that established the work engagements that were performed by the applicant involved him firstly accessing or logging into an app (the shifts app), which, at predetermined times each week, displayed available shifts. The shifts were identified with start and finish times and a specific geographical location where the delivery work would be undertaken. The applicant would accept the particular shifts that he found most desirable and thereby he would commit to undertake the selected shifts in the identified geographical location. The shifts app also required, inter alia, that the applicant was to indicate whether he was performing deliveries with a bicycle, motorbike/scooter, or motor vehicle. The applicant only performed bicycle delivery work.
[9] The services performed by the applicant were specified in the service contract to be; “Delivery of restaurant meals, food and drink and other items to homes and offices, both multiple pick-up and point-to-point.” At some point prior to the commencement of a shift which had been offered and accepted via the shifts app, the applicant would be provided with a Foodora branded insulated box, and other Foodora branded attire and equipment. The applicant would then ride his bicycle (with insulated box attached) to the predetermined geographical location in order to commence deliveries during the shift that had been arranged via the shifts app.
[10] Once the applicant was in the geographical location at the shift commencement time, he would access an app (the deliveries app) on his mobile device through which he would receive orders that had been placed with local restaurants via the Foodora website. These orders had been made by Foodora website customers, that is, individuals that had used the Foodora website to select food, drinks and other items provided by restaurants that had been linked into the Foodora website. The applicant would receive notification via the deliveries app, of an order which provided only the identification and location of the restaurant to which he would then travel. Once the items that had been ordered were collected at the restaurant, the applicant would then use the deliveries app on his mobile device to confirm that he had collected the order. Once confirmation was provided that the order had been collected from the restaurant then the applicant would be given the information of the delivery address to which he was then required to proceed.
[11] In the event that any issue arose regarding any aspect of the collection from the restaurant and/or the subsequent delivery to the customer, communication between Foodora and the applicant would occur using a communications app, such as WhatsApp, or infrequently, by way of mobile phone voice communication. Similarly, communications apps were used between delivery riders/drivers as a means to address any logistical issues that arose. Communications apps were used to address various issues such as shift swaps, delayed collection, or restaurant and delivery address location problems.
[12] The applicant would continue to perform the delivery work for the remainder of the shift in accordance with the logistical arrangements that were facilitated by the Foodora website, and the apps that were accessed via a mobile device. These arrangements did not involve any monetary transaction between the applicant and either the restaurant where the order would be collected, or with the customer who had placed the order via the Foodora website and received the delivery from the applicant. Although a tip may be given to the applicant by the customer upon delivery, the payment for the order and its delivery was made by the customer via the Foodora website, to the restaurant. Foodora obtained payment of a commission or delivery fee from the restaurant in respect of the order, and its delivery to the customer.
[13] About two weeks after the applicant had commenced with Foodora his role was changed to include work described as that of a Rider Captain. The Rider Captain position involved additional duties including helping other riders arranging shift swaps, and dealing with minor administrative issues regarding the organisation of other delivery riders/drivers. As a Rider Captain the applicant was paid an additional amount of $100 per week, and he was also given the opportunity to have preferential selection of the shifts as they were offered each week via the shifts app.
[14] In around October 2016, another delivery rider engaged by Foodora who was not an Australian citizen (Dorian), encountered problems involving the cancellation of his visa to permit him to work in Australia. As a result of these visa problems, Foodora suspended Dorian’s access to the shifts and deliveries apps thus denying him any further work. The applicant, who was a friend of Dorian, decided to allow Dorian to access the shifts and deliveries apps using the applicant’s details and identifications. This arrangement which was described as Dorian using the applicant’s Foodora account, developed over time to involve three other individuals who similarly performed delivery work for Foodora using the applicant’s Foodora account.
[15] Foodora management were initially unaware that the applicant was allowing other individuals to work on his Foodora account (the substitution scheme). The applicant would appear to Foodora to be working the relevant shifts, and he would be paid the appropriate amounts ($14.00 per hour plus $5.00 per delivery). The applicant would reconcile payments to the individuals who worked on his account by making deductions of 18% for tax, and a further 1% for his involvement in the substitution scheme. The applicant’s direct involvement in the substitution scheme included that he would have to be contactable during any shift worked by another individual in case an issue arose in respect to a delivery.
[16] In due course, circa September 2017, Foodora management became aware of the substitution scheme that the applicant had been operating. As the substitution scheme expanded, the applicant had used the acronym JKDC (Josh Klooger Delivery Company) to describe the scheme and identify shifts that were worked by others using his Foodora account. Although the service contract included a term that required the prior written consent of Foodora for any sub-contracting of the services provided by the applicant, when Foodora management became aware of the substitution scheme it took no steps to stop it, and instead commended the applicant for his entrepreneurial initiative.
[17] In November 2016, Foodora offered the applicant employment in a full-time position as Driver Manager. The applicant accepted the position as Driver Manager for which he received annual remuneration of $40,000, and he also continued to do some delivery work in addition to the variety of administrative functions that he performed in the role of Driver Manager. The applicant continued in the role of Driver Manager until March 2017 when he stepped down from that position as a result of other educational commitments.
[18] From March 2017 until his termination in March 2018, the applicant continued to perform the delivery work in much the same way as he had done prior to his elevation to the Driver Manager position. In addition to the delivery work, the applicant also performed some additional duties involving presentations to new riders for which Foodora paid him $20 per hour. Throughout and subsequent to the period that the applicant had been elevated to the Driver Manager position, he also continued to operate the substitution scheme which included four individuals who worked using the applicant’s Foodora account.
[19] In around October 2017, Foodora introduced a new system for the arrangements by which shifts were offered and selected by the delivery riders/drivers. Foodora introduced an arrangement known as a “batching system” which established a fortnightly assessment process and introduced a ranking of individual delivery riders/drivers as part of the process by which available shifts were offered and subsequently selected. As part of the batching system all delivery riders/drivers were ranked into one of six batches with batch ranking determined by individual factors or metrics that were linked to particular aspects of the work of the individual.
[20] The batching system used weighted individual performance factors such as; the number of times that a shift which had been offered and selected was not performed (referred to as “no-shows”); the number of orders delivered per hour as a deviation from a number of orders per hour delivered by other individuals in the same area at the same time; the percentage of time that an individual was late to commence a shift; shifts that were performed on Friday, Saturday or Sunday evenings; and the average weekly hours actually performed by an individual. These performance factors, or metrics, were used to rank an individual who would then be allocated into one of the six batches based upon their individual ranking. The batches were then used as the basis upon which access was provided to the offers of available shifts, so that those individuals in the highest batch, batch 1, were provided with access to offers of available shifts on Tuesday of each week, while those in batch 2 and lower were not provided with access to the offers of available shifts until Wednesday or Thursday in each week.
[21] As a result of the app based systems that were used to arrange the engagements of individual delivery riders/drivers, electronic message communication between the riders/drivers themselves, and with Foodora, became an integral part of the organisational mechanism for dealing with the various logistical issues that would arise from time to time. For example, if an individual could not attend a particular shift that she or he had accepted, a request for a replacement (shift swap) would be canvassed via an electronic messaging chat group that was initially established with a WhatsApp message group.
[22] The WhatsApp chat group reached its 256 person capacity, and in April 2016 the applicant decided to set up a new chat group using the Telegram app. The applicant had administration control rights over the Telegram app chat group and he also provided administration rights to Foodora. Over time, most of the Melbourne-based delivery riders/drivers utilised the Telegram chat group that had been established by the applicant. In addition, separate, private chat groups were also established amongst subgroups of the primary Telegram chat group used by the delivery riders/drivers.
[23] The applicant was paid $14.00 per hour plus $5.00 per delivery throughout the time that he was engaged by Foodora in delivery work. However, from July 2016 Foodora progressively reduced the payment for new delivery riders/drivers. In July 2016, the hourly rate for new riders/drivers was reduced to $13.00 plus $3.00 per delivery, and a $1 per delivery payment for Friday, Saturday and Sunday night work. Towards the end of 2016, Foodora removed the hourly rate for new riders/drivers completely, and fixed a flat $10.00 per delivery payment. The flat piece rate payment was progressively further reduced such that in February 2018 the rate for new delivery riders/drivers had become $7.00 per delivery.
[24] In early 2018 the applicant made public complaint about the rates paid to new delivery riders/drivers engaged by Foodora. On 19 February 2018, the applicant was interviewed as part of a subsequent appearance that he made on a television program called “The Project”. The applicant had also agitated public complaint about aspects of the rates paid by Foodora to delivery riders/drivers with assistance and amplification provided by the TWU.
[25] On 22 February 2018, management of Foodora wrote to the applicant raising concern about him potentially breaching confidentiality and intellectual property rights by maintaining and/or refusing to transfer ownership of the Melbourne-based Telegram chat group to Foodora. This communication requested that the applicant immediately leave the chat group so that Foodora could become owner and sole administrator of the chat group.
[26] On 2 March 2018, management of Foodora sent the applicant a further email which advised inter alia, that the applicant had not complied with the notification sent on 22 February 2018 in relation to returning intellectual property owned by Foodora. Further, this communication stated that Foodora had decided to not continue contracting the applicant’s services and to take the opportunity to serve the applicant with notice of contract termination that was effective immediately.
[27] Following his termination with Foodora, the applicant firstly secured some casual employment, and subsequently performed some paid work in the USA. The applicant has not sought reinstatement but alternatively, monetary compensation as remedy for his alleged unfair dismissal.
[28] Mr Gibian made submissions on behalf of the applicant during the Hearing. Mr Gibian referred to documentary submissions that had been filed on behalf of the applicant respectively dated 31 May and 29 June 2018. The submissions made by Mr Gibian referred to the two broad issues that he had identified as requiring determination, being firstly, the jurisdictional objection raised by the respondent asserting that the applicant was not an employee but a contractor, and secondly whether the dismissal of the applicant was harsh, unjust or unreasonable.
[29] Mr Gibian made submissions in respect to the first matter requiring determination, namely whether the applicant was an employee or independent contractor. In this regard Mr Gibian made reference to five particular issues which he said were part of the multifactorial examination of the nature of the relationship between the Parties, with no particular factor necessarily being determinative but which involved an examination of the totality of the relationship. Mr Gibian made submissions in respect of each of the five factors that he had identified and which he said, when considered in total, provided for a finding that the applicant was an employee of Foodora.
[30] Firstly, Mr Gibian submitted that the nature of the business operation conducted by Foodora was that of a delivery business that provided delivery to customers requiring food, drinks or other forms of meals. Mr Gibian said that there had been an attempt by the respondent to characterise its business operation as some sort of novel enterprise involving its use of technology including its website platform, as part of the suggestion that the nature of the relationship between its riders and its business would be different than it would be for any other delivery business whether it operated to provide delivery of meals, or delivery of other items.
[31] Consequently, Mr Gibian submitted that the applicant was a bicycle courier who had no relationship with any of the customers to which he delivered food, drinks or other meals. Mr Gibian submitted that the applicant could not derive or develop his own relationship with restaurants or with the customers to which he delivered, as he was not undertaking some form of independent business. Mr Gibian submitted that notwithstanding the particular web-based arrangements that facilitated the ordering and delivery of food, drinks or other meals, the applicant could only be said to be performing work for Foodora, and in Foodora’s business.
[32] The submissions made by Mr Gibian specifically referred to extracts from the Judgement in the case of Hollis v Vabu 1(Vabu) which he said supported that the fundamental determination of whether the relationship between the Parties was that of employee or independent contractor, involved a determination as to whether the individual served the others business, or did they perform their work as part of an independent trade or business of their own.
[33] The second factor that Mr Gibian submitted provided support for a finding that the applicant was an employee of the respondent involved the issue of the obligation to perform work. In this regard, Mr Gibian referred to clause 3.1 of the service contract document which he said established a requirement for the applicant to make himself available at the shift times that had been established by the respondent. Mr Gibian acknowledged that there was the capacity for the applicant to decline to work in accordance with a previously selected shift provided that firstly 24 hours, or, later, 48 hours’ notice was provided. However, Mr Gibian noted the contractual penalties that were applicable to a failure to undertake delivery work, and in addition, the practical consequences that the batching system introduced in terms of a compulsion upon the acceptance and performance of a maximum amount of work in order to maintain a higher-order ranking so as to obtain access to earlier options for shift engagements.
[34] The third factor or element that was emphasised in the submissions made by Mr Gibian involved the possession and exercise of the level of control over when work was to be performed and the manner in which it was to be performed. Mr Gibian submitted that the respondent had considerable capacity to give direction to the delivery riders/drivers in connection with the performance of their work and it had the capacity to introduce penalties including termination of engagement if it was not satisfied with the performance of work of the applicant.
[35] Mr Gibian made further submissions which referred to the fourth issue which he said was relevant to the determination that the applicant was an employee rather than independent contractor, namely the question of delegation. Mr Gibian said that this issue was the major point in the respondent’s submissions in support of the relationship between the Parties being found to be that of principal and independent contractor.
[36] In this regard Mr Gibian said that the respondent had placed particular reliance upon the applicant using the terminology JKDC which represented the Josh Klooger Delivery Company. However, Mr Gibian submitted that there was no evidence that the applicant had established an operation that involved some separate delivery business. Mr Gibian said that the applicant had allowed a number of other individuals to use his login account to perform work on shifts under his name. However, according to the submissions made by Mr Gibian, it was clear that this arrangement had not occurred in accordance with any contractual right to delegate the work, but instead it was undertaken contrary to the particular contractual terms.
[37] Mr Gibian submitted that the operation referred to as JKDC and conducted by the applicant did not involve the establishment of any corporate structure or even a business name. Mr Gibian said that the applicant described JKDC as a bit of a joke, and it did not represent any form of independent business that could in any way operate in competition with the respondent.
[38] The fifth factor or issue that Mr Gibian highlighted as relevantly important to the employee or contractor question involved the expressed terms that were contained in the service contract document. Mr Gibian made submissions which noted that the service contract document specifically used words which sought to establish that the applicant was engaged as an independent contractor. However, according to Mr Gibian, Foodora wanted to have the applicant and the other delivery riders/drivers, characterised as independent contractors because that arrangement provided particular beneficial outcomes in accordance with the respondent’s overall business model. Mr Gibian said that the true and proper characterisation of the relationship was not reflected by the terminology used in the service contract document.
[39] Mr Gibian made further submissions which dealt with the merits issues surrounding the claim for relief from unfair dismissal. In these submissions, Mr Gibian referred to the factors contained in s. 387 of the Act. Mr Gibian submitted that there was not a valid reason for the dismissal of the applicant. Mr Gibian said that there was considerable uncertainty as to what the actual reason for dismissal was, but it related to the applicant raising complaint about the payments made by Foodora to the delivery riders/drivers. Mr Gibian said that it was not a valid reason to dismiss an employee because they were expressing genuinely held concerns in relation to the fairness or otherwise of the conditions of engagement of persons generally.
[40] Mr Gibian also made submissions which challenged the purported reason for the dismissal of the applicant regarding the purported refusal to hand over the chat groups to the respondent. In this regard the evidence established that the applicant had in fact gone to some lengths to reconfigure the chat groups and therefore the purported reason for the termination of the engagement of the applicant had no basis in fact. Further, Mr Gibian made submissions which criticised the communication to the applicant that his termination had occurred without providing him an opportunity to explain any aspect of the handover of the chat group administration authorities. Mr Gibian said that the process that Foodora had used to deal with the issues surrounding the administrative control of the chat groups was obviously deficient and failed to provide the applicant with any opportunity to respond prior to advice of the termination of his engagement.
[41] Mr Gibian concluded his submissions by indicating that the applicant did not seek reinstatement, and as the respondent had entered into voluntary administration, reinstatement was not available. Mr Gibian submitted that the applicant should be provided with compensation as remedy for his unfair dismissal.
[42] Mr Darams made submissions on behalf of Foodora during the Hearing. The submissions made by Mr Darams referred to and relied upon a documentary outline of submissions filed on behalf of the respondent and dated 22 June 2018.
[43] The submissions made by Mr Darams during the Hearing highlighted three particular factors that were the subject of detailed, oral amplification. The first factor that Mr Darams elaborated upon in his submissions involved the right of delegation or sub-contracting that was undertaken by the applicant.
[44] In respect to the issue of the right of delegation or sub-contracting, Mr Darams referred to inter alia, the Judgement in ACE Insurance Ltd v Trifunovski and Others 2 (ACE Insurance). Mr Darams made submissions which highlighted extracts from the Judgement in the ACE Insurance case which identified the proposition that the contract of employment required that personal services be discharged by the employee, and that the ability to delegate or discharge the performance of services to another was inconsistent with the existence of a contract of employment. Consequently, Mr Darams submitted that the ability for the applicant to have others substitute to do his work, was a factor that strongly supported that the relationship between the applicant and the respondent was that of independent contractor and principal, and not that of employee and employer.
[45] Mr Darams submitted that the fact that someone, in this case the applicant, had the right to have another discharge the obligations under the agreement terms was a factor that was strongly indicative of the existence of a relationship of independent contractor rather than employee. The submissions made by Mr Darams referred to the terms of clause 2.2 and 2.3 of the service contract document which he said provided for arrangements to allow for the services to be discharged not just by the contractor, but by another person approved by the principal, in this case Foodora. Mr Darams contended that although there was a requirement for there to be prior written consent of the principal, it was the fact that the substitution of the work of the applicant had occurred which was important in the present circumstances.
[46] The submissions made by Mr Darams acknowledged that the applicant did not obtain the consent of Foodora before he sub-contracted the work to other persons, and consequently, the substitution scheme was conducted in breach of the specific terms of the services contract document. However, according to the submissions made by Mr Darams, the applicant could not rely upon a breach of the service contract to provide for a proper characterisation of the relationship. Further, Mr Darams referred to evidence that Foodora management became aware of the sub-contracting or delegating that the applicant was undertaking, and it took no issue with it, and in fact, encouraged it. Mr Darams submitted that the conduct of the Parties was said to have reflected that consent for the sub-contracting or delegating would have been provided. Therefore, Mr Darams submitted that the conduct of the Parties in the circumstances, gave rise to a variation to the terms contained in the service contract document.
[47] Mr Darams submitted that although the sub-contracting or delegating conducted by the applicant had not occurred in accordance with the exact terms of the service contract document, it was the ability to delegate or sub-contract the work which was fundamentally inconsistent with the basic requirements of an employment contract. Mr Darams submitted that the operation of the sub-contracting or delegating by the applicant was inconsistent with the personal obligation that arose under an employment contract. Consequently, Mr Darams submitted that sub-contracting that was conducted by the applicant, and which was permitted by the respondent, was a factor that strongly supported the existence of an independent contractor relationship and operated strongly against the existence of an employment relationship.
[48] Mr Darams said that the evidence established that, with some minor caveat, Foodora’s position was that it didn’t ultimately matter so much who did the work, but that the work was actually done. According to the submissions made by Mr Darams, the fact that Foodora was really only concerned as to whether or not the work was done as opposed to who did it, was not demonstrable of an employment relationship that is dependent upon the personal services of the individual.
[49] The further submissions made by Mr Darams traversed the second factor that was highlighted as providing support for the relationship between the applicant and the respondent to be found to be that of independent contractor and principal. In this regard, Mr Darams submitted that the applicant was operating or running a business enterprise that had been clearly identified as the Josh Klooger Delivery Company. Mr Darams acknowledged that the applicant did not formally incorporate a business entity, and that the JKDC business operation may be somewhat rudimentary. However, Mr Darams submitted that it was a business operation that possessed all the hallmarks of an enterprise that the applicant was conducting for his financial benefit.
[50] Mr Darams submitted that the JKDC operation was a business enterprise that was more than simply the applicant attempting to help out persons who had visa issues. Mr Darams mentioned that the applicant had established financial arrangements whereby he received money that was generated by other people performing delivery work using his Foodora account, and from this money he subtracted certain percentages to provide for tax and in recognition of his own involvement in the sub-contracting scheme. The applicant then provided the net payments to the individual participants in the JKDC operation.
[51] Consequently, Mr Darams submitted that the applicant was conducting an independent business enterprise and as a potential example of the independent nature of the JKDC operation, Mr Darams said that the applicant could have simultaneously used various delivery service providers such as Tipple, Uber Eats and Deliveroo. Mr Darams submitted that as Foodora allowed the applicant to potentially operate simultaneously on different delivery platforms, such arrangements essentially involved freelancing and represented a strong indicator of the absence of any employment relationship.
[52] The third factor that was highlighted by the submissions made by Mr Darams involved the issue of the obligation to perform work. Mr Darams submitted that the arrangements for engagement on a shift did not provide for any particular obligation for the applicant to accept whatever shifts were offered. Further, according to the submissions of Mr Darams, there was no obligation on a particular rider to accept or reject a particular job once engaged on a particular shift. Mr Darams submitted that the absence of particular obligations to perform work on any particular shift or in respect of particular orders once engaged on a shift, was a further factor that distinguished the arrangement of the applicant in this instance from an employment relationship.
[53] Mr Darams submitted that there was nothing in the service contract that allowed, enabled, or permitted Foodora to direct the applicant to accept a particular shift, and, further, once he had started a shift, the arrangements enabled him to reject a job. Mr Darams further stressed that the absence of obligations to perform particular work and particular tasks or jobs, was indicative of the existence of the relationship of contractor and principal rather than employee and employer.
[54] The further submissions made by Mr Darams touched upon the issue of the capacity and exercise of a level of control. Mr Darams acknowledged that there was some degree of control established by certain terms contained in the service contract. However, he submitted that it was the degree to which there was an ability to exercise control that in the case of the applicant, did not demonstrate the degree of control and its exercise that would ultimately result in the characterisation of the relationship being one of employment.
[55] Mr Darams also made submissions which rejected the proposition that the termination provisions in the service contract demonstrated or justified a finding of the relationship of employment. Mr Darams submitted that it was commonplace for contracts to provide capacity for the principal to terminate the contractor’s engagement in circumstances where the contractor provided poor services. Further, Mr Darams submitted that reference in the service contract document to various employment policies did not provide support for finding that the relationship between the applicant and the respondent was one of employment. Mr Darams said that many contracts contain reference to a variety of policies that contractors were required to observe, and that such arrangements were non-controversial and did not demonstrate any significant level of control, but merely operated as a means to provide for observation of relevant standards of conduct.
[56] It was also submitted by Mr Darams that the terms of the contract document were clearly relevant to the proper characterisation of the relationship. Mr Darams acknowledged that it was well established that the label that the Parties have included in their contract to describe their relationship was not necessarily determinative of the proper characterisation of that relationship. However, in circumstances where the relationship was ambiguous, the terms that were used by the Parties in any contract documentation was a factor of some significance in terms of the determination that should be provided for the true characterisation of the relationship between the Parties.
[57] Mr Darams stressed that in this instance the Parties had expressly described the relationship as being not one of employment. In particular, Mr Darams referred to clause 6 of the service contract document which included that “the Contractor understands and acknowledges that he or she is not an employee,…” Mr Darams submitted that appropriate recognition should be provided for the terms contained in an agreement that was validly made between two consenting Parties wherein they described the relationship as a contracting relationship and not employment.
[58] The further submissions made by Mr Darams mentioned various other aspects that were identified in the outline of submissions document that was filed on behalf of the respondent and which included appropriate recognition for factors including: the capacity for the applicant to work for other persons including competitors of the respondent; the clear absence of the provision of any employment entitlements; the applicant’s participation in the arrangements involving GST and the provision of an ABN; and, the provision of Foodora emblazoned clothing and equipment.
[59] In summary, Mr Darams submitted that in applying the established multifactorial tests and having regard for all of the relevant factors, the Commission should determine that the applicant was not an employee of the respondent. Mr Darams submitted that the proper characterisation of the relationship between the applicant and Foodora was that of contractor and principal.
[60] Further submissions were provided on behalf of the respondent in the event that the Commission found that the applicant was an employee protected from unfair dismissal. These submissions contended that the dismissal of the applicant was not harsh, unjust or unreasonable.
[61] It was submitted that the respondent had a valid reason to terminate the applicant’s employment as the relationship between the Parties had broken down as reflected by the applicant’s failure to comply with the lawful direction regarding the respondent’s intellectual property in respect of the chat group. Further, the submissions made on behalf of the respondent addressed the various factors contained in s. 387 of the Act, which, it was said, supported the proposition that any dismissal of the applicant was not harsh, unjust or unreasonable. Finally, the submissions made on behalf of the respondent asserted that in the event that the Commission determined that the applicant had been unfairly dismissed, there was no evidence to support proper basis to establish any financial loss and therefore no compensation should be provided as remedy for any unfair dismissal.
The Jurisdictional Objection - Employee or Contractor
[62] Section 382 of the Act establishes when a person is protected from unfair dismissal and relevantly includes the following terms:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and….” [emphasis added]
[63] Section 380 of the Act provides for meanings of employee and employer and it refers to the terminology of a “national system employee” and a “national system employer” the meanings of which are set out respectively in sections 13 and 14 of the Act. In this instance, the respondent was a constitutional corporation satisfying the meaning of a national system employer. However, the respondent raised a jurisdictional objection on the basis that the applicant did not satisfy the meaning of a national system employee as he was not employed by the respondent but, instead, was engaged as an independent contractor.
[64] The correct approach to a determination of whether a person has been engaged as an employee or a contractor involves issues of both fact and law. The particular factual circumstances of the relationship under examination need to be subjected to the legal principles that have been established as relevant to the proper characterisation that is to be provided to that relationship.
The Multifactorial Tests and the Overall Objective
[65] In this case, Counsel for the respective Parties concurred with the identified distillation of the relevant legal principles that have developed from a considerable body of case law commencing, in general terms, from the High Court Judgement in the case of Stevens v Brodribb Sawmilling Co Pty Ltd 3 (Brodribb), and including, inter alia, Hollis v Vabu 4 (Vabu), and, in respect to Decisions of this Commission, relevantly noting Abdalla v Viewdaze 5 (Abdalla), and Cai (t/a French Accent) v Do Rozario 6 (French Accent).
[66] In broad terms, the relevant legal principles have been described as the adoption of a multifactorial approach involving consideration of various factors including a number of identified indicia, with no single factor being decisive, and an overriding requirement for examination of the totality of the relationship between the Parties so as to ultimately provide a sound basis upon which to determine whether the relationship was one of employment or independent contractor. Further, the fundamental determination is frequently described as the application of an integration test as may be identified in the following extract from the Vabu Judgement which quotes from the Judgement of Windeyer J in Marshall v Whittaker’s Building Supply Co:
“… the distinction between an employee and an independent contractor is “rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own.” 7
[67] The multifactorial approach, as it is described, has been most helpfully summarised by the Full Bench of Fair Work Australia at paragraph [30] in the French Accent Decision and consideration in this instance has been undertaken in accordance with the structured approach that is set out in subparagraphs (1) to (6) of paragraph [30] of the French Accent Decision. It is unnecessary to repeat the full terms of subparagraphs (1) to (6). However, the following extract from subparagraph (5) provides a particularly insightful summary of the task that must be performed in order to properly determine the question of whether the relationship under examination is one of employment or independent contractor:
“The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole.” 8
The Nature and Manner in which the Work was Performed
[68] The nature of the work performed by the applicant was that of a bicycle courier, and it was performed in accordance with the shifts that were offered and selected via the shifts app. Although any actual shift engagement occurred by way of the offer and selection process using the shifts app, the shifts start and finish times and the particular geographical locations were fixed by Foodora. The offer and selection process for engagement occurred via the weekly access provided to shift offers established by Foodora via the shifts app.
[69] This process for engagement is similar to a variety of electronic and web-based systems that are frequently used to advise, in particular, casual employees of available shifts that are offered and which may be secured by providing response confirmation from the employee. Although the process is not as regulated and obligatory as a system whereby an employer posts a weekly electronic roster which actually allocates particular shifts to named part-time and/or casual employees, the results are essentially similar. The outcome being that on a weekly basis, available engagements which are determined by the principal/employer, are identified as being occupied by particular individuals.
The Terms and Terminology of the Contract
[70] The terms and terminology of the service contract or agreement document clearly attempt to establish a relationship of principal and independent contractor. In some respects the service contract document appears to go to considerable lengths to stipulate that the contractor is not an employee, and to reinforce that the document is constructing a relationship of principal and independent contractor. Clause 6.3 of the service contract expressly states that the principal has no responsibility to the contractor in respect of entitlements that normally arise in employer/employee relationships.
[71] The service contract document contains a number of significant errors, for example, it refers to Foodora as the principal who executes the agreement with the applicant, but at clause 1.12 the definition of “Principal” identifies a different entity, named as the “David Berger Family Trust & The trustee for the Nathan Besser Family Trust T/A Supper Time Services”. Further, the principal and the contractor (the applicant) are identified as being located in Victoria, but clause 27 of the service contract stipulates that the agreement is governed and construed in accordance with the laws in force in the State of New South Wales. Strangely, the applicant has executed the service contract as an authorised officer on behalf of the principal and also by himself as the putative contractor.
[72] The service contract contains many provisions which are similar in form and substance to those that would ordinarily be found in an employment contract document. The service contract contains clauses dealing with, inter alia, rostering and acceptance of jobs, the attire that is to be worn during the performance of services, the specific nature of the engagements to be undertaken including requirements that the putative contractor is to comply with all policies and practices of the principal, treating all reference to ‘employees’ as a reference to “the contractor”.
Capacity and Level of Control
[73] Foodora had considerable capacity to control the manner in which the applicant performed work, and it fixed the place of work and the start and finish times of each engagement or shift. The control that Foodora possessed and exercised over the manner in which the applicant performed work was reflected by the metrics that were used in the batching system which ranked the work performance of inter alia, the applicant. The operation of the batching system meant that in order to maintain a high ranking the applicant would be required to perform a certain number of deliveries during any particular engagement, to work a minimum number of shifts in a week, and work a number of Friday, Saturday or Sunday nights.
[74] Consequently, the level of control that might be exercised in employment situations by way of direct verbal or written instruction to an employee from the employer, was obtained by Foodora by virtue of the operation of, inter alia, the batching system. As a matter of practical reality, the applicant could not pick and choose when and where to work, or how fast or slow to make deliveries.
Work Performed for Others
[75] The applicant did perform some limited work for other delivery companies at different times, and the evidence clearly established that the relationship was established on a non-exclusive basis. Foodora understood and permitted its delivery riders/drivers to simultaneously operate on other web-based delivery platforms such as Tipple or Uber Eats. There was some evidence to suggest that there would be considerable practical difficulty associated with working simultaneously for two web-based food delivery companies.
[76] In many respects, the performance of work for other delivery companies might be equated with circumstances where an employee might have two or more jobs. For instance, casual restaurant staff might work for two or three different restaurants or bars, which may, in some circumstances, compete for business.
Separate Place of Work – Public Presentation
[77] The applicant did not have a separate place of work nor did he advertise his services to the world at large. Evidence of the operation of the substitution scheme or JKDC, confirmed that it was an arrangement between the applicant and four other individuals which was confined to undertaking work for Foodora. There was no evidence that JKDC provided delivery services generally or to any other specific web-based delivery company. The JKDC operation was confined to work performed for Foodora, for which Foodora paid the applicant, but which, with the knowledge of Foodora, was work that was performed by individuals other than the applicant.
Capital Investment
[78] The applicant did not have a substantial investment in the capital equipment that he used to perform his delivery work. The bicycle that he used for delivery work was also used generally for non-work-related bicycle activities. Without in any way being disparaging to cyclists, there was not a high degree of skill or training required to use or operate the bicycle in the performance of the delivery work.
Delegation or Sub-Contracting
[79] The issue of the sub-contracting of the work via the substitution scheme (JKDC) was perhaps one of the most significant factors that operated as support for the respondent’s contention that the applicant was not an employee of Foodora. The personal service nature of employment would normally not permit another individual to perform the work of an employee. The prospect that an employee could sub-contract her or his work to another would, ordinarily, be antithetical to the existence of any employment relationship.
[80] In this instance, particular provisions of the service contract provided, at clause 2.3, that the applicant could nominate another person to perform his work, but only in the event that the applicant was unable to perform the work, and, importantly, any such arrangement required the consent of Foodora. These terms, and others contained in clause 3 of the service contract, established arrangements whereby the work of the applicant could be undertaken by another person(s) provided that certain timeframes and other logistical arrangements were met and approved by Foodora. These arrangements represented the practical means by which shift swaps or delivery order swaps could occur. Importantly, these arrangements would necessarily involve the knowledge and consent of Foodora and result in payment for the rearranged work to be redirected from the applicant to the individual that actually performed the particular work.
[81] The arrangements involving shift or job swaps are circumstances which are frequently encountered in the context of an employment relationship. In many instances, a casual employee may be unable or unwilling to work a predetermined engagement and an employer may direct that individual to find a replacement. The replacement casual employee would usually work with the approval and knowledge of the employer, and she or he would receive the payment that would have otherwise been made to the employee that swapped their shift.
[82] The substitution scheme involved significantly different arrangements to those that might ordinarily exist in circumstances involving a shift or delivery order swap. The substitution scheme initially operated without Foodora’s knowledge. Foodora made payments to the applicant unaware that the work undertaken in respect of those payments was performed by someone other than the applicant.
[83] The applicant operated the substitution scheme without the prior written consent of Foodora as required by clause 21.1 of the service contract. Relevantly clause 21 of the service contract is in the following terms:
“21 ASSIGNMENT
21.1 The Contractor (and any Approved Person) must not subcontract any part of the Services without the prior written consent of the Principal, which shall be given at the absolute discretion of the Principal and on such terms and conditions as it deems fit.
21.2 In the event that the Principal consents to the subcontracting of the Services by the Contractor, the subcontractor must amongst other things, agree to comply with such terms and conditions as are contained in this Agreement.”
[84] Clause 21 of the service contract provides for the capacity for the applicant to sub-contract his work subject to the terms and conditions that are mentioned therein. Significantly, clause 21 does not provide for any unfettered right for the applicant to sub-contract his work. In particular, clause 21 requires that any sub-contracting must occur with the consent of Foodora, and any sub-contractor must observe the terms and conditions of the service contract.
[85] Once it became aware of the substitution scheme, Foodora management endorsed it. This endorsement was provided despite the substitution scheme operating in breach of the terms of clause 21 of the service contract. Further, Foodora management endorsed the substitution scheme in the knowledge that at least one sub-contractor (Dorian) was apparently performing work in breach of Australian Law, as his contract with Foodora had been suspended because as a foreign citizen, his Australian work visa had apparently been revoked.
[86] The other individuals who worked in the substitution scheme did so in circumstances where Foodora had refused to engage them as a result of some non-compliance issues with terms of the service contract. The subsequent engagement of those individuals through the substitution scheme, and with the knowledge and endorsement of Foodora, resulted in the somewhat bizarre position whereby Foodora effectively sanctioned the work that it had previously forbidden.
[87] Consequently, the substitution scheme operated in clear breach of the service contract, and in one case at least, it apparently facilitated the performance of work contrary to Australian Law. Foodora should not have permitted the operation of the substitution scheme. In these circumstances, the substitution scheme, as an example of sub-contracting, should not represent a proper or acceptable basis for validation of the characterisation that should be determined for the relationship between the applicant and Foodora.
Right to Suspend or Dismiss
[88] Clause 18 of the service contract provided Foodora with the right to terminate the applicant’s services, and on 2 March 2018, this right was exercised in respect to the applicant. Foodora also suspended the engagement of inter alia, the individuals who participated in the substitution scheme.
Presentation as Part of the Business
[89] Foodora presented the applicant to the world at large as an emanation of its business. Clause 4 of the service contract established an expectation that the applicant would dress in Foodora branded attire, and utilise equipment displaying the livery of the Foodora brand. The applicant did use the Foodora branded attire and equipment, and he fulfilled the expectations established by clause 4 of the service contract.
[90] Foodora also presented the applicant to the world at large as part of its business when, inter alia, it included the following statements on its website:
“We take great care to ensure excellent customer experience, be it from the user friendliness of our website and app. to quality [sic] of our packaging and the careful selection of our drivers.”
And
“Your food will be picked up directly from the restaurant by one of our couriers.” 9 [Emphasis added]
Tax
[91] Foodora did not deduct income tax from the remuneration paid to the applicant. It appeared that as the applicant’s annual level of remuneration was less than $75,000, there was no GST payable in respect to the amounts received by the applicant as payment for the work that he performed for Foodora. Further, it was identified that as part of the substitution scheme, the applicant deducted 18% from payments that he forwarded to the individuals that performed work on his Foodora account in recognition of what he anticipated to be the tax that he would be required to pay in respect of that income.
Periodic Remuneration
[92] The applicant was paid on a regular basis in respect to the completed shifts within each week. Foodora used software to generate a templated invoice which was provided on a weekly basis and referenced to the engagements that he had performed in the past week. The applicant would then review the invoices, advise Foodora of any corrections that were sought, and then subsequently payment would be made.
Holiday and Sick Leave
[93] The applicant was not provided with paid holidays or sick leave in respect to his work as a delivery rider.
Distinct Profession or Trade
[94] The work of the applicant did not involve an established profession, trade or distinct calling. The work of the applicant was that of a bicycle courier.
Goodwill or Reputational Damage
[95] The conduct of the applicant in his work for Foodora would potentially create goodwill or possibly, it could damage the public standing of the respondent.
Significant Business Expenses
[96] The applicant did not spend a significant proportion of his remuneration on business expenses.
Vicarious Liability
[97] In this instance, a fundamental concern arose regarding the doctrine of vicarious liability. The substitution scheme, which was in large part facilitated and sanctioned by the absence of any direct employment of the applicant and other delivery riders/drivers, created a circumstance involving an apparently illegal foreign worker, Dorian, putatively engaged in work for Foodora, working with the imprimatur of Foodora, but without any contractual arrangements existing between Dorian and Foodora. In fact the contractual arrangement between Foodora and Dorian had been revoked or suspended by Foodora.
[98] Consider the circumstances where Dorian was to have an accident whilst undertaking work as part of the substitution scheme, and perhaps he caused an injury to a member of the public similar to what happened to Mr Hollis in the Vabu case when a Crisis Courier collided with him on 22 December 1994. How would liability in respect of the injury to the member of the public be established, and against whom could any claim in respect of the injury be pursued?
Contemplation of the Alternative of Employment
[99] There was evidence that the respondent undertook some comparative analysis in respect to the remuneration that the applicant and other of its delivery rider/drivers were paid, and the remuneration that would have been payable under the relevant industrial instruments that would apply in employment circumstances. There was no evidence provided of the details of any outcomes generated by this comparative analysis.
[100] The comparative analysis activity of the respondent provided some basis to imply that Foodora was conscious that the independent contractor arrangements it had established for inter alia, the applicant, were created as a preferred alternative to employment. The contractor arrangements for the delivery riders/drivers closely resembled employment circumstances, and thus the comparative analysis was an activity that might logically be pursued. Consistent with the rationale for undertaking a comparative analysis with employment, one might rhetorically ask why such an activity would be undertaken if the respondent was comfortable that the independent contractor arrangements were genuine, legitimate and accurately reflected the proper characterisation of the relationship that it had with the applicant and the other delivery rider/drivers.
Conclusion - Employee or Contractor
[101] The various aspects and factors relevant to the proper characterisation that should be provided for the relationship between the applicant and the respondent have been carefully examined, evaluated, balanced and considered. An overall effect has been provided when standing back from the detailed picture, and properly viewing all of the accumulation of detail from a distance, in this way an informed, considered and qualitative appreciation of the whole picture has been obtained.
[102] In this instance, the correct characterisation of the relationship between the applicant and the respondent is that of employee and employer. The conclusion that must be drawn from the overall picture that has been obtained, was that the applicant was not carrying on a trade or business of his own, or on his own behalf, instead the applicant was working in the respondent’s business as part of that business. The work of the applicant was integrated into the respondent’s business and not an independent operation. The applicant was, despite the attempt to create the existence of an independent contractor arrangement, engaged in work as a delivery rider/driver for Foodora as an employee of Foodora.
Observation re Matters of Public Importance/Interest
[103] The particular circumstances that were revealed by the evidence in this matter, and the unusual circumstances in which this Decision has arisen from proceedings that were consented to in circumstances where the respondent had entered into voluntary administration, has provided an opportunity for the indulgence of an observation regarding questions of public importance and interest. The determination that the applicant was properly, an employee of Foodora and not a contractor has been made having regard for the conventional and well established approach described as the application of the multifactorial tests. In my view, there may be a need to expand and modify the orthodox contemplation for the determination of the characterisation of contracts of employment vis-à-vis, independent contractor, as the changing nature of work is impacted by new technologies.
[104] As corporate tax rates reduce and become lower than comparable marginal rates of personal income tax, incentive is created for the creation of a contractor relationship rather than one of employment. Corporations logically recognise the many potential benefits in engaging individuals to perform work utilising the machinery of independent contractor arrangements. Individuals may also be attracted to the lower tax regime of the independent contractor arrangement, and/or, as is often the case, the individual may have no option but to accept the engagement arrangement stipulated by the corporation.
[105] As in this case, the corporation (Foodora) stipulated the requirement for individuals to obtain an Australian Business Number and to create, at least the appearance, that the individual operates a business of their own. The corporation then avoids the many responsibilities and obligations that it would normally have as an employer. The responsibility for compliance with many important regulatory obligations including but not limited to taxation, public liability insurance, workers compensation insurance, statutory superannuation, licensing and work health and safety, is transferred from the corporation to the putative contractor.
[106] Contracting and contracting out of work, are legitimate practices which are essential components of business and commercial activity in a modern industrialised economy. However, if the machinery that facilitates contracting out also provides considerable potential for the lowering, avoidance, and/or obfuscation of legal rights, responsibilities, or statutory and regulatory standards, as a matter of public interest, these arrangements should be subject to stringent scrutiny. Further, if as part of any analysis involving the correct characterisation that should be given to a particular relationship, an apparent violation of the law, or statutory or regulatory standards is identified, as a matter of public interest, any characterisation of the relationship which would avoid or minimise the likelihood of such violation should be preferred.
Harsh, Unjust or Unreasonable
[107] As the applicant was an employee of Foodora, he also satisfied the other legislative requirements that established that he was a person protected from unfair dismissal. Therefore consideration must be made as to whether the applicant had been unfairly dismissed.
[108] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:
“(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[109] In this instance there was no dispute that the applicant had been dismissed, the Small Business Fair Dismissal Code was not applicable, and the dismissal was not a case of genuine redundancy. Consequently, only the provisions of subsection (b) of section 385 of the Act have relevance.
[110] The matter has required further consideration in respect to that element contained in s. 385 (b) of the Act, being whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
[111] The reason that was stated for the dismissal of the applicant was “…the breach of IP rights of Foodora,…” 10 This purported breach related to the applicant not handing over administrator control for the chat group used by Melbourne delivery riders/drivers. However, the true reason for the dismissal of the applicant was revealed by the contents of Exhibit 14, an email exchange between Foodora managers on 28 February and 1 March 2018.
[112] The contents of Exhibit 14 confirmed that the substantive and operative reason for the dismissal of the applicant was his conduct involving public agitation and complaint about the terms and conditions that Foodora imposed on its delivery riders/driver, particularly culminating in the applicant’s appearance on the television program “The Project”. Although the respondent would have understandably been aggrieved by what would have been seen to have been, at the very least, the disloyalty of the applicant’s conduct, there is a fundamental level of protection provided to employees who raise complaint in respect to workplace rights and entitlements.
[113] The dismissal of the applicant for substantive reason of his conduct involving complaint in respect to his and others’ workplace rights and entitlements does not represent a reason that could be found to have been sound, defensible or well-founded. Consequently, there was not a valid reason for the dismissal of the applicant related to his capacity or conduct.
[114] The respondent provided notification of dismissal in the form of an email sent at 10:54 am on 2 March 2018. This email purported to provide advice that the contract of the applicant had been terminated immediately.
[115] The respondent did not provide any proper opportunity for the applicant to respond or provide any form of explanation in respect of either, the issues surrounding the handover of administrator control of the chat group, or his ongoing public agitation of complaint in respect to workplace rights and entitlements, prior to the email advice of the termination of his contract.
[116] There was no evidence that the applicant was provided with an opportunity to allow him to have a support person present during any meeting that may have been held to discuss the potential for the termination of his contract because there was no evidence of any such meeting being held.
[117] The applicant was not dismissed for unsatisfactory performance and therefore this factor is not relevant.
[118] The respondent is not a small business employer and the size of its enterprise should have enabled it to have adopted far more acceptable and professional employment related practices and procedures.
[119] There was no evidence that the respondent did have dedicated human resource management specialists. However, the respondent appeared to have obtained assistance by way of legal advice. The absence of human resource management specialists in a business enterprise of the size of the respondent, could not justify the adoption of a procedure whereby the decision to dismiss the applicant was taken without providing any proper opportunity to hear from the applicant.
[120] There were no other relevant matters identified as requiring consideration.
[121] This unfair dismissal claim has involved significant consideration and determination of the question as to whether the applicant was an employee or independent contractor. Following detailed examination of all of the evidence of the relevant factors the Commission has determined that the applicant was an employee of the respondent.
[122] Subsequent consideration as to whether the dismissal of the applicant was harsh, unjust or unreasonable, has established that there was no valid reason for the dismissal of the applicant relating to his capacity or conduct. The true substantive reason for the dismissal of the applicant was not sound, defensible or well-founded.
[123] The procedure that the employer adopted whereby it advised the applicant of his dismissal abruptly by way of email communication and without any proper, prior warning, was plainly unjust, manifestly unreasonable, and unnecessarily harsh.
[124] In summary, the dismissal of the applicant was firstly, a dismissal from employment, and secondly, without valid reason involving established misconduct or capacity inadequacy. Further, the dismissal involved an entirely unjust and unreasonable process including the complete absence of any opportunity for the applicant to be heard before the decision to dismiss was made. Consequently, upon analysis of the various factors that are identified in s. 387 of the Act, an objective and balanced evaluation of all of the relevant circumstances has provided compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable. Therefore, the applicant’s claim for unfair dismissal remedy has been established.
[125] The applicant has not sought reinstatement as a remedy for his unfair dismissal. In the circumstances, particularly as the respondent has been placed in voluntary administration, reinstatement would not be an appropriate remedy.
[126] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.
[127] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decisions of, inter alia; Sprigg v Paul’s Licensed Festival Supermarket 11 (Sprigg); Smith and Ors v Moore Paragon Australia Ltd 12 and more recently, the cases of; McCulloch v Calvary Health Care Adelaide13; Balaclava Pastoral Co Pty Ltd v Nurcombe;14 and Hanson Construction Materials v Pericich15.
[128] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the respondent in lieu of reinstatement of the applicant.
[129] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[130] There was no specific evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise. Rather, it appeared that factors other than any Order of compensation have impacted upon the viability of the employer’s enterprise to the extent that it has voluntary entered administration.
[131] The applicant had been employed for a period of almost two years. The applicant would have been likely to have received remuneration of approximately $946.31 per week if he had not been dismissed.
[132] There was no evidence upon which to conclude that the employment of the applicant may not have continued for a significant period of time. The applicant was clearly a high performing delivery rider, he had previously been promoted to a managerial position, and his entrepreneurial acumen had been recognised and applauded by Foodora management.
[133] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed, I have notionally considered that the employment of the applicant would have continued for at least a further 26 weeks. Therefore, the total remuneration that would have been received in the notional period of 26 weeks following dismissal amounted to a figure of $24,604.06.
[134] The total amount of remuneration received in alternative employment, as identified, and that which may be reasonably likely to be earned between dismissal and the making of the Order for compensation, has been calculated to be $9,045.00.
[135] Thirdly, in this instance there was no established misconduct of the applicant, and consequently I have decided to make no reduction to the amount of compensation to be provided to the applicant on account of any established misconduct.
[136] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[137] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.
[138] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, and not applying the approach taken in Sprigg in a rigid, determinative manner, I have decided that the amount of compensation to be provided to the applicant should be $15,559.00 ($24,604.00 minus $9045.00).
[139] Accordingly, separate Orders [PR702329] providing for unfair dismissal remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr M Gibian, Senior Counsel with Ms L Biviano from The Transport Workers’ Union of Australia for the Applicant.
Mr J Darams, Counsel with Mr B Jones and Ms C Robinson from Clayton Utz for the Respondent.
Hearing details:
2018.
Sydney:
July, 3.
October, 11 & 12.
Printed by authority of the Commonwealth Government Printer
<PR702086>
1 Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 106IR 80.
2 ACE Insurance Ltd v Trifunovski and Others [2013] FCAFC 3 209FCR 146.
3 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
4 Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 106IR 80.
5 Abdalla v Viewdaze Pty Ltd (2003) 122IR 215.
6 Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307; (2011) 215IR 235.
7 Ibid @ paragraph 40.
8 Ibid @ paragraph 30 (5).
9 Exhibit 15 @ page 213.
10 Exhibit 12 – Annexure “NS-15”.
11 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
12 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
13 John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.
14 Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.
15 Hanson Construction Materials Pty Ltd v Darren Pericich, (Ross P, Masson DP and Lee C), [2018] FWCFB 5960.