Deliveroo dragged to court in unfair dismissal case that could have “significant ramifications” for the Aussie gig economy

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A rider for Deliveroo Australia is taking the food delivery giant to court today, in a Fair Work Commission unfair dismissal case.

A statement from the Transport Workers Union (TWU) suggests rider Diego Franco was sacked by Deliveroo in April, after three years working as a delivery rider and at the height of the COVID-19 pandemic.

TWU claims this caused financial hardship for him and his young family.

The union alleges that Franco was sacked because of slow deliveries, but was not given any specific examples of where or when this problem arose, or any warning to improve his performance.

According to TWU, this is the first case of its kind involving Deliveroo.

However, in 2018 a delivery rider won an unfair dismissal case against Foodora. At that time, Foodora was ordered to pay the worker $15,559. The company ultimately exited the Australian market.

“Diego is bravely standing up against one of the biggest gig economy companies in the world after getting sacked without warning at the height of the pandemic with a wife and baby to support.

In a statement, TWU national secretary Michael Kaine said this case could have “significant ramifications” for the gig economy in Australia.

With the absence of federal government regulation in this sector, this is a way to hold companies to account,” he said.

“This abuse and exploitation must stop because it is hurting workers and dragging our economy down.”

A Deliveroo spokesperson denied Franco was unfairly terminated.

“Mr Franco’s contract was ended after repeated slow deliveries,” the spokesperson told SmartCompany.

“He was notified of this, however continued to deliver food late.”

The spokesperson stressed that late deliveries are bad both for customers and restaurants, and also for riders, “since anything that deters people from ordering from Deliveroo could impact their earning potential”.

“We stand by this decision and the public would expect us to do so,” they said.

The spokesperson also said the company’s riders are engaged as independent contractors, and suggested they should remain so.

“Riders have the absolute freedom to decide whether, when and where they work, and if they do go online they can decide how long to work,” they said.

“Riders can and do work with multiple platforms, including competitors, at the same time. They can also freely reject orders offered to them as there is no obligation to work.

“Riders frequently tell us that the freedom that comes with self-employment is the key reason why they choose Deliveroo, and we are defending this claim to protect those freedoms.”

The case comes at a time when the COVID-19 recession is driving more people to pick up insecure and gig-economy work.

While unemployment figures dropped slightly in August, many of the 110,000 jobs created were ‘self-employed’, suggesting a surge in gig-economy — and particularly delivery — workers.

Kaine claims such workers are “constantly” let go without warning.

“They have no minimum rates, no guaranteed wages, no right to sick leave even during the pandemic, and no adequate insurance cover if they get injured or killed while working,” he said.

“This is the type of work which is included in ABS ’employment’ statistics, yet these aren’t jobs and the workers have no rights.

“This is not a good basis to build your economy on and lowers labour standards to a Dickensian level.”

A TWU survey of delivery riders last month found that average earnings, after costs, was just over $10 per hour. Almost 90% said they have seen their pay packets decrease, and 70% said they are struggling to pay for bills and food.

Worryingly, more than a third of riders said they have been injured on the job. Of those, 80% said they received no support from the company they were working for.

This story was updated at 2.30pm on October 20, to include comments from Deliveroo.

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