A fascinating article in The Guardian newspaper this week regarding the status of food delivery people, specifically whether they are properly classified as independent contractors or employees. In a decision which could have impacts throughout the ‘Gig Economy’, Foodora Australia has admitted riders owed $5m were ‘more likely than not’ employees.
Under current Australian labour law, a mix of factors determines whether a person is an independent contractor or an employee including whether the employer exerted a high level of control. In this case, it made riders wear branded uniforms and sign up for set shifts, and restricted them to certain areas..
Contractors have greater flexibility to choose when to work, but are not entitled to award wages, penalty rates or annual leave – which are only available to employees.
If you employ or contract to any people as part of your business, it is crucial to get legal advice to ensure you are meeting your obligations. Harsh financial and civil penalties apply if you are not complying with the law.
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