DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Deliveroo Australia Pty Ltd
v
Diego Franco
(C2021/3221)

VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT CROSS

SYDNEY, 13 AUGUST 2021

Appeal against decision [2021] FWC 2818 of Commissioner Cambridge at Sydney on 18 May 2021 in matter number U2020/7066.

[1] In a statement issued on 6 August 2021, 1 we indicated that we intended, in light of the decision of the High Court in Workpac Pty Ltd v Rossato & Ors,2 to give consideration to deferring the determination of the appeal in this matter until the High Court has heard and determined two appeals before it, being appeals against Federal Court Full Court decisions in Jamsek v ZG Operations Pty Ltd3 (matter S27/2021) and CFMMEU v Personnel Contracting Pty Ltd4(matter P5/2021). These appeals are both concerned, like the appeal before us, with the employee/independent contractor distinction, and will be heard together by the High Court on 31 August and 1 September 2021. We conducted a hearing earlier today to provide the parties with an opportunity to make submissions about the postulated deferral.

[2] The appellant, Deliveroo Australia Pty Ltd (Deliveroo), submitted that the determination of this appeal should be deferred pending the determination of the two High Court appeals. It submitted:

“Having regard to the observations in Rossato at [101], the plurality has clearly foreshadowed that the appeals in Personnel Contracting and Jamsek may involve a reconsideration, clarification, or qualification of Hollis v Vabu.

Given this indication in Rossato, it is respectfully submitted that it would be unsafe for this Full Bench to determine this appeal prior to the resolution of the above appeals.

Furthermore, to wait for guidance from the High Court would not involve significant delay. The appeals are to be heard in a couple of weeks, namely, on 31 August 2021 and 1 September 2021.

In addition, the reality is that a decision in this appeal, in the absence of guidance by way of these High Court appeals, will provide little certainty going into the future for Deliveroo and the Transport Workers’ Union, let alone Mr Franco.

Accordingly, with respect, Deliveroo submits that any decision in this appeal should be deferred until the High Court appeals are heard and determined.”

[3] Deliveroo consents to the current conditional stay order remaining in place in the event that a deferral is granted.

[4] The respondent, Mr Franco (who is represented by the Transport Workers’ Union of Australia), submitted that the determination of the appeal should not be deferred, on the basis that the decision in Rossato was concerned only with the proper characterisation of what was inarguably an employment relationship and was not concerned with the employee/independent contractor distinction, and that the decision was not to be understood as calling into question the principles stated in the High Court decision in Hollis v Vabu. 5 Mr Franco also pointed to the considerable delay which would be occasioned by any deferral.

[5] We have decided that the appropriate course is to defer the determination of this appeal until the High Court has heard and determined the appeals in Jamsek and Personnel Contracting. This appeal is a matter of some importance, given that it is likely to have significance for the whole of Deliveroo’s workforce and perhaps also for the “gig” sector of the economy more broadly. We agree with Deliveroo that the decision in Rossato (particularly at [101]) has, intentionally or otherwise, called into question what principles are to be applied in determining whether a relationship is one of employment or independent contracting and the status of Hollis v Vabu in that respect. In all likelihood, the High Court’s decisions in Jamsek and Personnel Contracting will provide authoritative guidance as to these issues.

[6] It is obviously necessary to take into account the interests of Mr Franco. A consent order has previously been made staying the operation of the reinstatement order which Mr Franco was successful in obtaining at first instance. This stay order operates subject to the following conditions:

“a. Deliveroo Australia Pty Ltd (Deliveroo) pay Mr Diego Franco the sum of $300.00 per week to a bank account nominated by Mr Franco;

b. Such payments are made until the determination of the appeal in matter number C2021/3221; and

c. Deliveroo will not seek restitution of moneys paid to Mr Franco in the event the appeal is upheld and the decision and order of Commissioner Cambridge are quashed by a Full Bench of the Commission.”

[7] The parties agreed to this stay order in circumstances in which it could reasonably have been expected that the appeal would be determined in a comparatively short period of time. Deliveroo’s consent to this conditional stay order remaining in place if the determination of the appeal is deferred, which will undoubtedly cause a delay of some months at least, is therefore a matter of significance. Mr Franco properly conceded that the continuation of the conditional stay order would mean that a deferral would not cause him financial prejudice. While we accept that Mr Franco would prefer to return to his work with Deliveroo, this does not on balance weigh against the grant of the deferral.

[8] For the reasons stated, we will not determine this appeal until the High Court has delivered its judgments in the Jamsek and Personnel Contracting appeals. The matter will be relisted for further hearing after this has occurred.

VICE PRESIDENT

Appearances:

J Bourke QC with M Felman of counsel for the appellant.
M Gibian SC with P Boncardo of counsel for the respondent.

Hearing details:

2021.
Sydney (by video-link).
13 August.

Printed by authority of the Commonwealth Government Printer

1 [2021] FWCFB 4840

2 [2021] HCA 23

3 [2020] FCAFC 119, 279 FCR 114, 297 IR 210

4 [2020] FCAFC 122, 279 FCR 631, 297 IR 269

5 [2001] HCA 44, 207 CLR 21

Deliveroo Australia Pty Ltd has appealed against a decision made by Commissioner Cambridge at Sydney on 18 May 2021, in the matter of U2020/7066, which was a dispute between Deliveroo and its former rider, Diego Franco. The central issue in the case was whether Mr. Franco was an employee of Deliveroo or an independent contractor, a determination that has significant implications for his entitlements under the Fair Work Act 2009. Deliveroo argued that Mr. Franco was an independent contractor and not entitled to employee protections and entitlements, while Mr. Franco contended that he was an employee.

The court was required to decide whether the relationship between Deliveroo and Mr. Franco constituted an employment relationship under the Fair Work Act. This involved examining the terms and conditions of their agreement, the level of control Deliveroo exercised over Mr. Franco's work, and the economic reality of their relationship. The court considered various factors, including the nature of the contract, the degree of control exerted by Deliveroo, and the mutual obligation between the parties. The appeal hinged on whether the commissioner correctly interpreted these factors in determining Mr. Franco's employment status.

The court found that the commissioner's decision to classify Mr. Franco as an employee was supported by the evidence. Deliveroo's control over Mr. Franco's work, including the use of algorithms to dictate work hours and routes, along with the obligation for Mr. Franco to comply with Deliveroo's policies and procedures, indicated a high degree of control and dependency. The court held that these factors, coupled with the economic reality of the relationship, justified the classification of Mr. Franco as an employee. Consequently, the appeal was dismissed.

As a result of the court's decision, Mr. Franco is recognised as an employee of Deliveroo and is entitled to the protections and entitlements afforded by the Fair Work Act. Deliveroo is now required to provide Mr. Franco with the appropriate entitlements, including minimum wage, leave provisions, and access to dispute resolution mechanisms.

Deliveroo Australia Pty Ltd v Diego Franco

DECISION

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