TWU

Celebrations in Foodora case may be short-lived

Release date: 12/11/2018

SMH, By Michael Kaine, 12 November 2018
 
Australia has always been a trailblazer on workers’ rights and last week another significant leap forward was achieved. Food delivery platform Foodora admitted through its administrators that its delivery riders are employees not contractors and accepted the claims against it, amounting to more than $8 million in unpaid wages, superannuation and taxes.

Never before has a major company in the gig economy acknowledged its workers are employees or that it owes them minimum pay or retirement contributions.

Foodora has acknowledged its riders were employees.  The admission of culpability by Foodora is an important step forward and it shows that companies are beginning to realise that they bear a responsibility for the people who work for them. 

But while this win is significant and will give succour to workers around the world, its long-term effects may be stymied.
 
Gig economy companies from Uber to Deliveroo to Airtasker are no doubt examining their worker contracts to make sure they do not confer rights.
 
They may tidy up their communications to their workers and alter arrangements regarding uniforms and equipment to ensure they slide under the radar on workplace rights.
 
Even the Foodora announcement has a sting in the tail. The company may have finally owned up to years of denying its workers rights but it leaves behind a mess as it skips out of Australia.
 
Parent company, German-based Delivery Hero, has offered to throw just $3 million at its $8.2 million debts, despite making revenue forecasts of $1.2 billion just last week.
 
And it’s not just workers who have been robbed. Foodora’s administrators found the company owes almost $1 million in taxes while the report to creditors outlines that the $1.5 million bill in unpaid wages owed to riders who are Australian residents - 30 per cent of the 5000 riders - will be borne by taxpayers through government schemes.
 
This demonstrates why government needs to regulate the on-demand economy so that the swindling of workers and tax revenues ends. But we must regulate it in the right way.
 
Foodora delivery rider Josh Klooger who launched an unfair dismissal case against the company.
 
Creating new labels for workers in the on-demand economy to shoehorn them between the definition for worker and independent contractor won’t solve the problem. Companies are already knowingly breaking the rules by denying workers rights. A new label will just encourage wealthy companies to develop new ways of getting around labour standards.
 
What our system needs is flexibility to allow workers to collectivise and challenge abuses. What the Fair Work Act needs is the ability to hear cases when employers structure their businesses to rip their workforce off - regardless of what category those workers fall into.
 
The imperative to act is great since the abuses are so serious. Companies are expanding, shackling up more and more vulnerable workers to their 18th century-style conditions via apps. Our union has helped delivery riders like Rafi, left at home for weeks unable to pay his bills after breaking his ankle while delivering an order. We have spoken out for Fernando, who works rostered shifts but gets not one cent if there are no deliveries. We are representing Josh, who was unfairly sacked earlier this year for speaking out when rates for deliveries got slashed.
 
These workers need rights, not labels.
 
Australia as a pioneer for workers rights can ensure that no matter how “disruptive” the workplace ideas emanating from shiny high-rise boardrooms in wealthy tech companies, workers will have a voice and can claim their rights. This must be our legacy to future generations.
 
Michael Kaine is the national secretary of the Transport Workers’ Union.

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