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WORLD FIRST AS FOODORA ADMITS ITS AUSTRALIAN DELIVERY RIDERS ARE EMPLOYEES & OWES OVER $8M


TWU MEDIA RELEASE, 8 November 2018
 
A world first has been achieved in Australia today as administrators for food delivery company Foodora acknowledged the company owes over $8 million in wages, superannuation and taxes after years of misclassifying its delivery riders. But parent company, German-based Delivery Hero, will pay just $3 million to cover its debts, despite forecasting revenues of $1.2 billion just yesterday.

The significant move acknowledging that “delivery riders should have been classified as at least casual employees”, follows claims by the Transport Workers’ Union, Australian Taxation Office and Revenue NSW over gross wage theft, non-payment of superannuation and unpaid taxes. The administrators accept riders are owed over $5.5 million, the ATO over $2.1 million, Revenue NSW over $550,000 and revenue in Victoria and Queensland $400,000.
 
“This is an important day for workers not just in Australia but worldwide. Never before has a major company in the on-demand economy admitted that its workers have rights in this way. This confirms what workers and unions have been saying for years: that workers deserve rights to minimum pay, sick leave, payment when they are forced off the job because of injury, the right to collectively bargain and the right to challenge an unfair dismissal. Despite owing over $8 million in total to Australian workers and taxpayers, Delivery Hero will throw just $3 million at them and hope to walk away. We need urgent government regulation to protect vulnerable workers and our tax revenues from wealthy tech companies which don’t want to pay their way,” Michael Kaine TWU National Secretary.
 
Foodora announced in August it was pulling out of Australia and subsequently appointed external administrators. After claims by the TWU, the ATO and Revenue in NSW, Victoria and Queensland, administrators wrote to creditors today to acknowledge the claims were correct. The report states Australian workers can be compensated by government-funded schemes while overseas workers cannot. Creditors will meet next week on November 16th to vote on the arrangements in the administrators' report.
 
The TWU said it would continue pursuing Delivery Hero for unpaid wages.
 
“Delivery Hero cannot walk away after stealing from workers and simply continue its eighteenth century-style exploitation elsewhere. Through our global peak organisation, the International Transport Workers’ Federation we will be putting pressure on this company to fully pay its Australian riders and ensure riders in other countries have rights. Individuals get pursued across national borders when they break the law, why must companies be any different?” said Tony Sheldon, TWU co-ordinator on the on-demand economy and chair of the ITF’s road transport section.
 
Parent company Delivery Hero, one of the biggest app-based food delivery companies in the world, is claiming it is owed $28 million from Foodora Australia. Yesterday in a guidance to markets Delivery Hero predicted revenues of over $1.2 billion this year with a jump of 62%, with the “business continuing to perform extremely well globally”.
 
A Fair Work Commission decision in an unfair dismissal case involving a Foodora delivery rider is expected soon after hearings ended last month. The TWU argued during the case that delivery riders have rights - including against unfair sackings.
 
Hundreds of riders have protested in Sydney and Melbourne this year demanding rights.
A survey of riders has shown three out of every four riders are paid below minimum rates.
 
The rider survey also found:
 
  • Almost 50% of riders had either been injured on the job or knew someone who had.
  • Over 70% of riders said they should get entitlements such as sick leave.
  • 1 in 4 riders (26%) work full time hours (40+ hours per week).
  • 3 in 4 (76%) riders work 20 or more hours per week.
  • Over 26% work more than 40 hours a week.
  • The average age is just under 26 years.

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