1
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
[2018] FWC 6836
DECISION
E AUSTRALIA FairWork Commission
[2018] FWC 6836
2
Darams called two witnesses who provided evidence on behalf of Foodora, one of whom
provided her evidence via video link with Munich, Germany.
Factual Background
[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.
[2018] FWC 6836
3
[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
[2018] FWC 6836
4
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
[2018] FWC 6836
5
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.
The Case for the Applicant
[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
[2018] FWC 6836
6
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.
[2018] FWC 6836
7
[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
[2018] FWC 6836
8
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.
The Case for the Respondent
[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
[2018] FWC 6836
9
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
[2018] FWC 6836
10
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.
[2018] FWC 6836
11
[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.
Consideration
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:
[2018] FWC 6836
12
(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:
[2018] FWC 6836
13
“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”.
[2018] FWC 6836
14
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
[2018] FWC 6836
15
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.
[2018] FWC 6836
16
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:
[2018] FWC 6836
17
“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
[2018] FWC 6836
18
[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
[2018] FWC 6836
19
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.
[2018] FWC 6836
20
[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.
S. 387 (a) - Valid Reason for the Dismissal Related to Capacity or Conduct
[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.
[2018] FWC 6836
21
[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.
S. 387 (b) - Notification of Reason for Dismissal
[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.
S. 387 (c) - Opportunity to Respond to any Reason Related to Capacity or Conduct
[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.
S. 387 (d) - Unreasonable Refusal to Allow a Support Person to Assist
[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.
S. 387 (e) - Warning about Unsatisfactory Performance
[117] The applicant was not dismissed for unsatisfactory performance and therefore this
factor is not relevant.
S. 387 (f) - Size of Enterprise Likely to Impact on Procedures
[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.
S. 387 (g) - Absence of Management Specialists or Expertise Likely to Impact on
Procedures
[2018] FWC 6836
22
[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.
S. 387 (h) - Other Relevant Matters
[120] There were no other relevant matters identified as requiring consideration.
Conclusion
[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.
Remedy
[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
[2018] FWC 6836
23
for the guidelines that have been established in the Full Bench Decisions of, inter alia; Sprigg
v Paul’s Licensed Festival Supermarket11 (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,
[2018] FWC 6836
24
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.
