Case name & citation: Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156
- Court: Fair Work Commission – Full Bench
- Date of Decision: 17 August 2022
- Judges: Vice President Hatcher, Vice President Catanzariti, Deputy President Cross
- Areas of Law: Employment Status; Worker Classification; Unfair Dismissal
Background of the Case (Deliveroo Australia Pty Ltd v Diego Franco)
Diego Franco worked as a delivery rider for Deliveroo Australia Pty Ltd from April 2017 to April 2020. His work arrangement was governed by a “supplier agreement,” which was revised multiple times.
In April 2020, Deliveroo identified Mr. Franco as having delayed delivery times. On April 23, 2020, Deliveroo emailed him stating he had failed to deliver orders on time, breaching his agreement. On April 30, 2020, Deliveroo disabled his access to the Rider App, effectively terminating his engagement.
Franco filed an unfair dismissal claim with the Fair Work Commission (FWC), which ruled in his favour.
Initial Fair Work Commission Ruling (May 18, 2021)
Commissioner Cambridge determined that Franco was an employee of Deliveroo, not an independent contractor. His dismissal was unfair, as it was harsh, unjust, and unreasonable. He was not given clear expectations regarding delivery times. Further, he was not given an opportunity to respond before being terminated. He should be reinstated with lost wages restored.
Deliveroo’s Appeal
Deliveroo challenged the decision, arguing Mr. Franco was a contractor, not an employee. They contended the Commissioner had misapplied the legal test for employment classification. The dismissal had a valid reason (poor delivery performance) and proper procedural fairness was followed.
Full Bench of the Fair Work Commission Decision (August 17, 2022)
The Full Bench reviewed the appeal in light of new High Court precedents in Personnel Contracting and Jamsek, which emphasized that employment relationships should be determined primarily by contract terms. The contract’s written terms are the deciding factors, rather than the actual working relationship.
Reassessment of Employment Status:
The Full Bench ruled that Franco was not an employee but an independent contractor. It based this on the terms of the 2019 supplier agreement, which:
- Did not establish an employer-employee relationship.
- Allowed Franco to choose when and where to work.
- Permitted him to work for competitors simultaneously. (He also worked for competitors Uber Eats and DoorDash.)
- Gave him control over delivery routes and equipment.
- Allowed him to delegate work to others.
Ignorance of Actual Working Relationship:
Despite evidence that Deliveroo exercised significant control over Franco’s work in practice—through its algorithm, performance monitoring, and branding—the court ruled against considering these real-world conditions. Instead, it focused solely on the written contract.
Jurisdictional Error in Original Decision:
Since Franco was found to be a contractor, he was not protected from unfair dismissal under the Fair Work Act 2009. This rendered the original FWC decision invalid.
The Full Bench admitted that Deliveroo treated Franco unfairly, but it stated that it had no jurisdiction to remedy the unfairness due to his independent contractor status.
Here is an excerpt from the judgment
“The ……… conclusion is that Mr Franco was not a person protected from unfair dismissal within the meaning of s 382 of the FW Act and the Commission had no jurisdiction to entertain his unfair dismissal application nor power to grant him the remedies that it did. The Commissioner’s decision and order must therefore be quashed, and Mr Franco’s unfair dismissal application must be dismissed as incompetent. Regrettably, this leaves Mr Franco with no remedy he can obtain from the Fair Work Commission for what was, plainly in our view, unfair treatment on the part of Deliveroo.” (p. 57)
Outcome of the Appeal:
The appeal was upheld. The original decision was quashed and Franco’s unfair dismissal claim was dismissed.
Takeaway from the case (Deliveroo Australia Pty Ltd v Diego Franco)
The ruling clarified that in the gig economy, contractual terms, rather than practical work conditions, determine employment status. The case highlights the challenges gig workers face in securing employee protections under Australian labour laws.
References:
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FWCFB/2022/156.html
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