Fair Work Recognises Rights of Workers in Gig Economy

Mar 21, 2022 | Employment Law

The Fair Work Commission (“FWC”) has made a landmark ruling that could see more drivers and delivery workers in gig economy being given rights as employees instead of independent contractors. Deliveroo is appealing the decision, and if upheld, this could see the restructuring of the business model of many platform companies.

The FWC ruled that a former Deliveroo driver was an employee of Deliveroo Australia Pty Ltd rather than an independent contractor. The decision in Diego Franco v Deliveroo Australia Pty Ltd (U2020/7066), if upheld on appeal, will be a momentous case with the potential to completely reform how gig-economy platforms operate. This decision comes in the wake of increasing scrutiny of gig-economy companies for their inconsistent treatment of workers, hindering the rights and protections available to them. Other countries have already made the move towards enforcing the classification of gig economy workers as employees.

What were the facts?

The applicant (Mr Franco) entered into a supplier agreement in 2017 to become a Deliveroo driver. The Supplier Agreement, and all subsequent agreements, contained terms stating that Mr Franco:

• was a supplier in business of his own account;
• could provide services personally or through a delegate;
• was free to work for any third parties;
• was required to provide his own vehicle and phone was required to pay an administrative fee;
• was required to complete the services safely and efficiently;
• and must organise his own tax and insurance.

Mr Franco worked as a Deliveroo driver for three years and also performed services for Uber Eats and Door Dash during that period. In 2020, he received an email notifying him that the Supplier Agreement services were terminated by Deliveroo due to delays with his delivery times compared with other Deliveroo drivers on similar routes. Under the agreement, Deliveroo had the right to terminate at any time and for any reason with provision of one week of written notice. Mr Franco sought to challenge his termination in an unfair dismissal application.

The FWC Decision – Employee or Contractor?

Commissioner Cambridge of the FWC determined that Mr Franco was an employee of Deliveroo and ordered Deliveroo to reinstate his employment.

As an employee, different rights attach to termination of the relationship and the FWC held that the dismissal was harsh, unjust and unreasonable. To be protected from unfair dismissal, the question turns on whether the person is an employee and has completed the minimum employment period as required in section 382 of the Fair Work Act 2009 (Cth).

Important Factors to Consider

 The definition of ‘employee’ is given meaning by the common law, which involves the consideration of various factors examining the holistic nature of the relationship between the parties. The Commissioner considered the following factors in reaching its conclusion that Mr Franco was an employee:

• Although Mr Franco could determine when and where he felt like working, the practical reality was that an automated system directed him to work at particular times and to regularly make himself available;
• The supplier agreement contained provisions which are similar in form and substance to ordinarily found in an employment contract;
• Mr Franco had no capacity in any real sense to negotiate any of the terms of the supplier agreement; and
• Mr Franco was not carrying on a trade or business of his own but was carrying on the business of Deliveroo. This finding is interesting given Mr Franco had the ability to work for competitors, and will be challenged in the appeal that has been confirmed by Deliveroo.

Unfair Dismissal

In the opinion of the FWC, Deliveroo did not provide Mr Franco with a valid reason for dismissal or an opportunity to respond to the complaints prior to terminating the contract, as required under the Fair Work Act. The failure to deliver food within a reasonable time was not a valid reason for dismissal, given that he was not informed by Deliveroo on the delivery times it expected.

In making the reinstatement order, the FWC noted: “irrespective of whether Mr Franco was a contractor or an employee, it was plainly unconscionable to terminate what would be well understood to be his primary source of income, without first hearing from him.”

Conclusion

The increasingly digital employment landscape and the rise of gig economies will test the balances between existing common law concepts of employment and lived realities of working relationships.

We represent both employers and employees, so if you or your organisation needs further advice or assistance in relation to redundancies or dismissals, please call Etheringtons Solicitors on (02) 9963 9800 or via our contact form.

Employment Law Update: Casual Conversion and CEIS

Mar 20, 2022 | Employment Law

In March of this year, the government passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill which made significant changes to the Fair Work Act 2009 (Cth) regarding casual workers. Under the new laws, employers were given a 6-month grace period to make any adjustments to implement new rights for casual employees, and provide them with a Casual Employment Information Statement (CEIS). The deadline for this conversion is 27 September 2021, and this article will provide you with a brief guide on the legislative changes and what they mean for both employees and employers.

Changes to the Definition of Casual Employee

An employee will now be considered casual if:

1. The employer makes no firm advance commitment to a continuing and indefinite pattern of work when offering employment; and
2. The employee accepts the offer of employment on the basis that there is no firm advance commitment to a continuing and indefinite pattern of work.

Things to consider when determining if you have made a firm advance commitment to a continuing and indefinite pattern of work include the following:

• Whether the employee can accept or reject work;
• Whether the employee is entitled to casual loadings or specific rates of pay;
• Whether the employee will work according to the needs of the employer; and
• Whether the employment was described as casual employment.

Regular patterns of work will not in and of itself be indicative of a firm advance commitment to a continuing and indefinite pattern of work, however this may be the case in some circumstances. For example, if an employee is engaged on the basis that they will work a fixed amount of shifts on the same days each week for an indefinite period, this is unlikely to constitute casual employment under the new changes to the Fair Work Act.

Casual Conversion

Another key change relates to regular casual employees’ right to casual conversion. Essentially, a casual employee who has been employed for at least 12 months, or who has worked a regular pattern of hours in the past 6 months, has the right to be offered permanent part-time or full-time employment. Offers from employers for conversion must be in writing and given within 21 days from when the employee reaches 12 months of employment.

There are limited circumstances in which an employer is not required to make an offer for casual conversion. This will occur when there are reasonable grounds to not accept the offer based on facts that are known or foreseeable at the time of the decision. These include:

• That the employee’s position will cease to exist within 12 months from when an offer should be made (i.e., once an employee is employed for 1 year) ;
• The hours of work that the employee performs will significantly reduce within the next 12 months;
• There will be a significant change to the days and times that the employee works; and
• Making the offer would not comply with a recruitment or selection process required by law.

If an employer has reasonable grounds to not make an offer, they must provide written notice with detailed reasoning of why the offer is not being made within 21 days from which the employee reaches the 1 year mark.

In the instance an employer does not make an offer or provide notice detailing that they will not offer casual conversion, a casual employee has the right to request an offer for conversion if they meet the above eligibility requirements and:

• The employee has not refused a previous offer of casual conversion in the past 6 months; and
• The employer has not refused a previous request for casual conversion.

This request must be in writing and should appropriately coincide with the regular pattern of hours the employee has been working. Under the new legislative provisions, employers must provide a written response to a request for conversion within 21 days. If an employer chooses to grant a request, their response must detail in writing:

• The type of employment (full-time or part-time) that the employee will be converting to;
• The employee’s work hours after the conversion takes place; and
• The date when the conversion will take place.

An employer can only refuse a request upon consultation with the employee and if there are reasonable grounds to refuse the request based on the circumstances known or foreseeable at the time of refusal.

Given the complexity of these new provisions, it is crucial that small business owners and employers begin assessing the eligibility of existing casual employees for conversion before 27 September 2021 to better manage their obligations to make offers or receive requests for conversion.

Casual Employees Information Statement

The Fair Work Ombudsman has introduced the Casual Employees Information Statement (CEIS) which must be given to all casual employees. The CEIS covers information about the rights of casual employees including:

• the definition of a casual employee
• when an employer has to offer casual conversion
• when an employer doesn’t have to offer casual conversion
• when a casual employee can request casual conversion
• casual conversion entitlements of casual employees employed by small business employers
• how the Fair Work Commission can act in dealing with disputes about casual conversion

These statements should be provided to all existing casual employees as soon as possible before 27 September and to all new casual employees moving forward. An employer can provide a copy of the CEIS to staff via:

• mail;
• email;
• in person;
• by fax; or
• by emailing a link to a copy of the CEIS available on the employer’s intranet.

How Etheringtons Solicitors can help

Given the various legislative changes in recent times concerning casual employment, it is important to seek legal advice if you are unsure about your employment contract or concerned about your potential liability as an employer. You can contact the highly skilled employment law team at Etheringtons solicitors via our contact form or call 02 9963 9800 for a no-obligation discussion.

Should You Be Keeping Your Pay a Secret?

Mar 7, 2022 | Employment Law

Discussing salaries and remuneration is often a controversial and clandestine topic in the office. However, there has been a recent push towards greater pay transparency to allow for a more equal workplace in light of social and political changes concerning issues, such as the gender pay gap. This article will discuss whether an employer can enforce pay secrecy onto their employees, and what the potential advantages and disadvantages that having pay transparency can have.

The Legality of Pay Secrecy

The simple answer is: it is not illegal to discuss your pay. However, employers can restrict your ability to discuss your pay or remuneration within your employment contract. These clauses can be particularly common in industries where discretionary incentives are offered or where pay differentiates between employees based on performance.

Pay secrecy clauses have been banned in other jurisdictions, such as the United States and the UK, in order to reduce workplace discrimination. In 2015, Australia’s Gender Pay Gap Bill attempted to ban pay secrecy clauses, but it was unsuccessful. So whilst pay secrecy is still legal in Australia, it is important for businesses to make considerations based on their industry and business specifically, and consequently businesses may want to seek personalised and experienced advice when making these decisions.

Advantages of Pay Transparency

As mentioned above, pay secrecy has been linked with actual or perceived workplace inequality. Actual inequality arises when businesses use pay secrecy clauses to unfairly differentiate the remuneration of employees based on discriminatory or unfair factors such as gender, ethnicity or age. Perceived inequality occurs when employees assume that, due to the mere presence of a pay secrecy clause, remuneration is unequal. Therefore, facilitating greater transparency can operate to quash any negative perceptions and demonstrate your business is treating all employees fairly.

Other advantages of pay transparency include:

• Increasing employee motivation and job satisfaction;
• Improving workplace culture;
• Promoting flatter management structures; and
• Improving the business’ reputation.

Disadvantages of Pay Transparency

Whilst there are clearly some advantages to abandoning pay secrecy clauses, these must be balanced with benefits that can come from enforcing pay secrecy in certain workplaces. These include:

• Greater organisational control;
• Less workplace conflict;
• Protection of employee privacy; and
• Maintaining greater employer bargaining power.

It is worth noting that pay secrecy will become more disadvantageous if competitors or the industry as a whole begin moving towards pay transparency, despite the advantages mentioned above.

How Etheringtons Solicitors can help

With over 30 years’ experience, Etheringtons Solicitors have a proven track record in providing tactical advice and representation in various contentious and non-contentious employment matters. Whether you are a business owner or an employee, our team are well placed to provide advice across a wide range of matters. If you or your business require further information in relation to pay secrecy, please contact us on (02) 9963 9800 or via our contact form here.

False and Misleading Representations 

Feb 7, 2022 | Employment Law

In December 2021, the Australian Securities and Investments Commission (ASIC) launched civil proceedings against a former ANZ subsidiary, superannuation trustee OnePath. The allegations levelled at OnePath include charging fees for no services rendered and making false and misleading representations to members.

More than $4 million in incorrect fees were collected by OnePath, now known as Insignia Financial Limited (IFL). This included instances where OnePath charged fund members for “financial adviser service fees”, despite the fact that they did not have financial planning advisers. OnePath sent correspondence to these fund members that instructed that they were obligated to pay these fees.

ASIC is claiming that these representations were false and misleading and that OnePath has breached its obligations to provide fair, efficient and honest financial services.

The case will proceed to the Federal Court in 2022.

False and misleading representations

Businesses are not permitted to make statements that are false or are likely to create a false impression. This applies to any statements from the business including advertising, product packaging, and information on social media platforms.

In ASIC’s action against OnePath, they allege false and misleading statements were made when OnePath told members they had to pay adviser service fees and did not advise members of their options to cancel those fees.

To protect yourself against false and misleading representations, keep alert and ask questions if you feel as though you may have been charged excessively or treated unfairly.

What to do if you think you are a victim of false and misleading representations

If you believe you may be a victim of a false and misleading representation, you have a number of options available to you.

1. Contact the business or service provider – explain the problem or confusion and see whether it can be rectified.
2. The ACCC – if you are unable to resolve the issue by speaking to the business, you can lodge a consumer complaint with the Australian Competition and Consumer Commission.
3. Legal Action – independent legal advice is often important to evaluate your options and situation. In some circumstances, you may be entitled to take your complaint to the small claims court or tribunal in your state or territory.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with insurance or consumer law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.