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Foodora Does A Runner Owing Millions In Back Pay

Foodora does a runner owing millions in back pay

Food delivery company Foodora will cease its operations in Australia this month, while it continues to defend allegations that it treated workers unlawfully and owes millions in back pay.

In a statement, the company said it would “cease operations in response to a shift in focus towards other markets where the company currently sees a higher potential for growth”.

Sham contracting

The Fair Work Ombudsman is taking action against Foodora in the federal court alleging sham contracting – by classing two Melbourne riders and one Sydney driver as “independent contractors” instead of “employees” – which meant the company didn’t have to pay them minimum award wages and entitlements like annual leave and superannuation.

Separately, another rider has lodged a claim for unfair dismissal in the Fair Work Commission, arguing he was sacked for speaking out about low pay and poor conditions.

The Transport Workers Union accused Foodora of abandoning their Australian workers.

“Ever since they arrived in Australia, Foodora, like other food delivery companies, has denied its riders fair rates, superannuation, workers compensation, annual leave, the right to collectively bargain and even forces them to work shifts for no pay at all,” TWU national secretary Tony Sheldon said in a statement.

Writing on the wall for gig economy

Industrial relations expert Miles Heffernan from Industrial Relations Claims believes Foodora saw the writing on the wall.

“It seems the legal net was closing in on Foodora, and its days of exploiting delivery riders and drivers were numbered,” he said.

“No Australian should be working for below minimum award pay and conditions, whether they are in the gig economy or not.

“Australia is built on the concept of ‘a fair go’ – and ‘a fair day’s pay for a fair day’s work’, and I think companies in the gig economy have been taking advantage of workers for too long.

“I think Foodora is jumping a sinking ship – and quite frankly, if they are not prepared to pay their workers what they deserve, then good riddance!”

Foodora will close in Australia by August 20, but says it will continue to manage the ongoing legal proceedings.

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