The Fair Work Ombudsman has launched legal proceedings in Federal Court against food delivery service Foodora, alleging that the ‘independent contractor agreements’ signed by Foodora drivers and riders amount to sham contracts, and that they are in effect employees.

According to a press release from the ombudsman, the action will specifically examine two Melbourne delivery riders that were 19 when they signed the contracts, and one Sydney driver who was 30.

Delivery services like Uber Eats, Deliveroo, and Foodora operate by employing drivers and riders as contractors, which allows them to relinquish responsibility for things like minimum wage and superannuation. In 2016, the Central London Employment Tribunal ruled that drivers employed by Uber (which uses the same model) do constitute employees and are subject to the same rights as regular workers.

The Fair Work Ombudsman is asserting that the contractors qualify as employees on the basis of: the level of control exerted by Foodora over their “hours, location, and manner of work“; the requirement to wear a uniform and the equipment provided by Foodora; and the absence of any negotiation as to rates of pay. In addition to those, they assert it just looks like they aren’t running a business:

Each of the workers was not genuinely conducting their own delivery business, in that they: did not advertise or promote their availability to perform deliveries to the public; did not delegate their delivery duties with Foodora to any other person; and did not have their own customer base, business premises and insurances.

The ombudsman is alleging that, over a four-week period, the three drivers were underpaid a total of $1,620.74 – with most of that belonging to the Sydney driver, who worked more in the period.

Foodora is potentially facing a fine of $54,000 if they are found to be in breach of the Fair Work Act.

If Foodora loses this case, it’ll set a pretty hefty precedent that will likely apply across the board to a number of these app-based delivery services.

Image: Tiia Monto