What the Foodora Case Means for Gig Workers

The Fair Work Ombudsman has alleged that Australian food delivery service Foodora has been engaging in sham contracting since 2015, resulting in the underpayment of workers who were incorrectly classified as contractors instead of employees.

This raises important questions about how the Gig Economy can improve its reputation when it comes to fair work - and it seems that with the emergence of new business models that use smartphone-driven technology as a means for deploying a roaming workforce helping to bring supply together with demand – the parameters must be all the more clearly defined. Fair work Ombudsman Natalie James says that the Foodora case and others like it “will be an opportunity for the court to consider these cases in today's economy and how they should be properly categorised”. There is a widely held belief that the benefit of freedom and flexibility of work comes at the cost of reduced and unpredictable pay, little or no job security and limited long term benefits. A study of over 200 Giggers or Gig Economy freelancers from well-known marketplaces such as Airbnb, Etsy, Fiverr, Contently, iStock, and 99designs earlier this year revealed that 73% of gig workers would leave a marketplace due to payment issues.

 

How to protect yourself as a contractor in the Gig Economy

The three workers were allegedly asked to sign a contract entitled “Independent Contractor Agreement” when they started work, implying they were contractors - filling in their ABN number and agreeing to a non-negotiable fixed hourly rate and/or amount per delivery made. However, because of the level of control, supervision and direction Foodora had over the nature of their work, it was decreed the workers were actually classified as employees. This included:

  • Wearing Foodara branded T-shirts and using branded food storage boxes and bike racks.
  • They were not genuinely conducting their own delivery businesses: they weren’t advertising or promoting their service to the public, unable to negotiate their rates of pay, nor to delegate their delivery duties with Foodora to any other person or have their own business premises or insurances.
  • The company made no superannuation contributions and the Ombudsman’s investigation allegedly found the employees had been underpaid their minimum lawful wage rates, casual loading and penalty rates for night time, weekend and public holiday work.

Keeping up to date with the continually changing Fair Work Legislations can be difficult and time consuming. The most recent updates will be taking effect as of January 2019 and will be introducing the new concept of a “Regular Casual Employee” – employees under most modern awards who can request to convert their employment to full time. It may be easier for freelancers today to join a community like Weploy, that will protect and support them in the search and remuneration for freelance jobs.

Image from iOS (5)-2

The Solution

We employ our contingent community of Weployees and play them the correct, current award-based rate per hour, including superannuation. Employers pay a flat hourly fee, submitted by a credit card payment or invoice from us, which includes payment to the Weployee, payroll tax, WorkCover and a flat service fee. The future of work is contingent – and the future is now, with 40% of US workers estimated to be Freelance by 2020. Weploy is the smartest way to stay protected whilst providing valuable support for agile businesses today.

 

Sign Up
Sara

Written by Sara

What Type of #Gigster Are You?

The future of work is right here, right now. Technology is changing the nature of work every single day. Whilst your personal preference may be to hav…

How to find your reason for being (IKIGAI)

The argument for companies to elevate social purpose within their business priorities rather than hide them away within “Corporate Social Responsibili…

4 Techniques to Beat Decision Fatigue

When I think about the best leaders I've worked for there has always been one element that stands true. I trust and respect their decision making. I d…