Multi indicia test - employee or independent contractor?

Recently I prepared a comprehensive employment law thesis involving the employment status of three gig economy workers engaged by three different online food delivery companies in Australia. The three cases were Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd t/a UberEATS (2020); Diego Franco v Deliveroo Australia Pty Ltd (2021); and Joshua Klooger v Foodora Australia Pty Ltd (2018). The aim of the paper was to provide an analysis of the key factors considered by the Fair Work Commission when deciding whether these workers were in fact employees or independent contractors.

The paper found that in all three cases, the companies had engaged these workers as independent contractors. When the performance of these workers was below standard, the companies terminated the ‘independent contractor agreement’ that they had in place. Following that, the workers claimed that they were incorrectly labelled as independent contractors. They argued that they were in fact employees and that they were unfairly dismissed by their ‘employers’. As a result, all three workers lodged an unfair dismissal claim under section 394 of the Fair Work Act 2009. The companies rejected these claims and identified jurisdictional objections.

To determine whether these workers were ‘employees’ or ‘independent contractors’, the Fair Work Commission applied the common law Multi Indicia Test to correctly identify the type of working relationships, and all circumstances surrounding the workers engagement had to be considered. Several past cases were thoroughly reviewed with the emphasis given to Stevens v Brodribb Sawmilling Company (1986) and Hollis v Vabu (2001). The key factors considered were predominantly around control, work restrictions, contractor agreement and public presentation, to name a few.

It is interesting to note that despite the similarities in the cases, only two of the three workers were found to be employees of those businesses. Whilst with the third case, it was found that the business had no control over the worker. The worker was able to pick and choose when to work; had no restrictions working for competitors and was not required to present the business to the world. Therefore, it was found that the worker was an independent contractor.

Based on the findings of the paper, it was concluded that although the Multi Indicia Test had once upon a time served its purpose, it might not always be the case now. The ‘common sense’ response of the Multi Indicia Test is no longer aligned with modern, everyday workplace contexts; therefore, more careful considerations are required. With the advancement of technology, things have no doubt changed. Therefore, to examine whether a worker is an employee or an independent contractor, it is important for businesses to analyse it through the lens of a modern, changing workplace, impacted by a new digital world.

The recommendation of the paper is for the Fair Work Act 2009 to provide basic rights, such as minimum protections, rights, and entitlements for all Australian gig workers. Given the ambiguity in this topic, further analysis of similar upcoming court cases within the online food delivery sector was recommended, to allow those businesses to determine whether they should start engaging these workers as employees or continue as independent contractors. One thing that is clear - the gig economy presents a significant policy challenge for Australia; that the existing Multi Indicia Test may no longer be fit for purpose, and that a legislative response to the challenge will certainly be required.

This article is prepared to only provide general information about the topic. It is not intended to be used as advice in any way.

Views: 82

Comments are closed for this blog post

© 2022   Created by Jo Knox.   Powered by

Badges  |  Report an Issue  |  Terms of Service