Foodora rider awarded $15k for unfair dismissal

The Fairwork Commission has handed down a highly important decision in the matter of Joshua Klooger v Foodora Australia Pty Ltd [2018] FWC 6836. Mr Klooger was a delivery rider for Foodora in Melbourne who had his employment terminated after he spoke out against pay rates and conditions in the Foodora structure and gig economy generally.

Mr Klooger commenced working as a ‘Corporate Rider’ (delivery rider) with Foodora in March 2016. Until his dismissal he held various titles/positions such as ‘Rider Captain’ and ‘Driver Manager’. When Mr Klooger first began working as a rider in 2016, workers would select shift times in certain geographical locations through Foodora’s app or website. Access to shift selection was not restricted or preferenced except for users designated as ‘Captains’. In October 2017, Foodora introduced a new system of shift selection. This system would use certain performance metrics, such as number of orders delivered per hour, to rank users into a series of ‘batches’ that would determine when a user was able to select upcoming shifts. Additionally, Foodora had been progressively reducing payments for new riders/drivers since about July 2016 to the point where an hourly rate was eliminated and replaced by a flat rate of $8.00 per delivery in February 2018.

Shortly after the payment rate had reached $8.00 per delivery, Mr Klooger made a complaint about pay rates and conditions at a public rally and on an interview with the television show ‘The Project’.  Following these appearances, Foodora management requested Mr Klooger hand sole control of a mobile messaging app chat group to Foodora. When Mr Klooger failed to comply with these requests, Foodora advised they had decided to no longer contract his services, effective immediately. In response Mr Klooger filed an application for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009.

Foodora raised two lines of argument, first that Mr Klooger was an independent contractor and not entitled to unfair dismissal protections, and second even if he were an employee he was dismissed for a valid reason. In establishing Mr Klooger’s status as an independent contractor counsel for Foodora pointed to the agreement between the parties which was a standard form contract titled “INDEPENDENT CONTRACTOR AGREEMENT” expressly stipulating Mr Klooger was engaged as an independent contractor and not an employee. Other indicators of contractor status included: the level of control Mr Klooger reserved over the amount of shifts he did or did not take in a week, that the service agreement was not exclusive, and the ability to have someone else discharge the obligations. (Foodora drivers/riders could have someone other than themselves perform deliveries with permission).

In terms of the validity of the reason for dismissal, Foodora pointed to its request for Mr Klooger to handover administrative control of the chat group and Mr Klooger’s failure to do so as a valid reason for his dismissal under s 387(a).

Counsel for Mr Klooger disputed both assertions arguing that Mr Klooger worked directly for Foodora and not as part of a distinct, independent trade or company of his own. Secondly the reason for dismissal was not valid as it was unclear what the actual reason was, was not based in fact, and failed to give Mr Klooger any real opportunity to respond.

Commissioner Cambridge weighed a number of factors such as the nature of work and manner in which it was performed, the terms and terminology of the contract, ability to delegate work, level of control over working conditions, expenses/capital investment on the part of Mr Klooger and the extent of remuneration received. On these factors the Commissioner found that the proper characterisation of that relationship was that of employee-employer, in the Commissioners own words: “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.”

On the issue of the dismissal, the Commissioner rejected the arguments of Foodora that the dismissal was based on a valid reason. Referring to an email chain between Foodora managers on 28 February and 1 March 2018, the Commissioner determined that the substantive and operative reason for Mr Klooger’s dismissal was his conduct involving public agitation and complaint about the terms and conditions that Foodora imposed on its delivery riders/drivers.

As Foodora is currently in voluntary administration, Mr Klooger was unable to seek reinstatement, rather he sought damages. The Commissioner agreed with this remedy and determined, based on an average weekly remuneration, that Mr Klooger be awarded the sum of $15,559.00 as compensation.

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