On 18 May 2021, the Australian Fair Work Commission delivered a landmark decision that Deliveroo driver Mr Diego Franco is an employee, not an independent contractor. That ruling continues to resonate as of 2025, with its implications still under active debate in our evolving gig economy.

However, while the decision was a significant step forward for worker protections, it was not the definitive victory many hoped for. Deliveroo has since expressed its intention to appeal the decision, leaving uncertainty in its wake. What remains clear is that the laws around gig work and digital platforms continue to evolve – a trend that is being closely monitored by both workers and industry players alike.

The Current Situation & Previous Rulings

Currently, many workers in the gig economy are classified as independent contractors, which leaves them with minimal protection against job insecurity or unsafe work conditions. In contrast, establishing an employment relationship would offer greater rights and support. This shifting dynamic has been the subject of intense legal scrutiny over recent years.

Before Diego v Deliveroo, Australian law had remained unclear on whether gig workers should be deemed employees or independent contractors. While Deliveroo’s planned appeal of the case continues to fuel debate, recent decisions – including the 2023 ruling in the UberEats matter (read more here) – indicate that courts are split on this issue. For additional context on the gig economy, you might also want to explore our in-depth article on the Gig Economy in Australia.

Can the decision in Diego v Deliveroo finally settle the debate? Let’s break down the case.

What Happened & Why Is Diego v Deliveroo Significant?

Like several cases involving gig economy giants, the current decision also involves an application for an unfair dismissal remedy. Mr Diego Franco lodged his application against the food delivery app Deliveroo on 21 May 2020 after his services were terminated effective 30 April 2020 – as he was entering his fourth year as a rider on the platform.

The reasons for his dismissal were centred on issues such as:

  • Circumstances where orders were not actually received but were marked as delivered
  • Significant delays in delivery times

This situation compelled the Commission to resolve two key questions:

  1. Is Mr Franco an employee or an independent contractor?
  2. Was his dismissal unfair?

Deliveroo maintained that Mr Franco was an independent contractor and therefore not entitled to the protections against unfair dismissal. Conversely, Mr Franco argued that his position was that of an employee. For insights on the differences between being an independent contractor and operating as a sole trader, check out our guide on Operating as a Sole Trader.

Both parties presented compelling arguments. Mr Franco and Deliveroo each brought forward detailed evidence and legal reasoning regarding the nature of their working relationship. In discussions about contractual relationships and worker rights, it’s always important to consider the totality of the arrangement – much like our exploration of what constitutes a contract can shed light on these multi-layered issues.

Commissioner Cambridge vividly illustrated his conclusion by stating that when you examine all aspects of the case, “like the colours from the artist’s palette, a complete picture emerges” – one where Mr Franco and Deliveroo clearly assume the roles of employee and employer respectively. He noted that this “impressionistic” picture, while not as precise as a photograph, offers a compelling overall perspective.

For instance, consider famous impressionist paintings such as Van Gogh’s ‘Starry Night’ or Monet’s ‘Water Lilies’ – at a close-up, they are a blur of brushstrokes, but stepping back reveals the intended image and its beauty. In the same way, when all factors are viewed together, there is a clear answer regarding Mr Franco’s employment status.

Establishing that Mr Franco is an employee is pivotal. As an employee, he is afforded protections against unfair dismissal – protections not extended to independent contractors. After thoroughly considering the facts, Commissioner Cambridge ruled that Mr Franco’s dismissal was harsh, unjust and unreasonable, ordering his reinstatement along with continuity of service and restoration of lost pay.

Hearing this strong conclusion provided a measure of relief for Mr Franco, as it implied he should be able to return to work. Nonetheless, with Deliveroo’s appeal pending, the future remains uncertain.

The Two Sides

Let’s take a step back from the outcome and delve deeper into each side’s arguments. Which perspective resonates more strongly? Here’s a closer look.

Mr Franco’s Case

Mr Franco focused on two principal issues:

  1. Whether he is an employee or an independent contractor
  2. Whether his dismissal was harsh, unjust, or unreasonable

1. Employee or Independent Contractor?

Addressing this question involved a “multifactorial examination” of the relationship between Mr Franco and Deliveroo. Four primary considerations were assessed:

  1. Consideration of all relevant circumstances – no single factor is determinative; the entire relationship must be evaluated.
  2. Determining if Mr Franco was running his own business or was integrated into Deliveroo’s operational framework.
  3. Focusing on the facts of this case rather than past precedents.
  4. Recognising that the use of technology by platforms like Deliveroo introduces novel engagement dynamics that often mirror those found in casual employment.

Deliveroo argued that Mr Franco was a contractor running his own mini-business. They claimed he was simply producing invoices for his services. However, Mr Franco countered this by highlighting factors such as his use of branded clothing and equipment, the high degree of control exerted in his work arrangements, and the lack of capacity to negotiate the terms of his supplier agreement.

Ultimately, Mr Franco contended that the entire picture pointed to an employment relationship. In support of this view, you can also refer to our article on What is a Contract? to understand how contractual terms can sometimes mask the true nature of a working relationship.

2. Unfair Dismissal

Mr Franco argued that his dismissal was unfair for several reasons:

  • Slow deliveries: Even if his average delivery times were slower than some, there was no prior notification that this metric would be used as grounds for dismissal.
  • Unclear expectations: Mr Franco was not provided with explicit time frames or performance benchmarks, rendering the dismissal arbitrary.
  • Dismissal via email: The communication lacked the human touch expected in employment matters, with no attempt made to discuss the issues directly.
  • No opportunity to respond: He was not afforded a chance to explain or mitigate the concerns raised against him.

For further clarity on employee rights and the implications of unfair dismissal, our guide on Employment Contracts offers valuable insights.

Deliveroo’s Case

Representing Deliveroo, Mr Felman argued that the totality of the relationship clearly indicated that Mr Franco was an independent contractor. His stance was essentially the mirror image of Mr Franco’s position.

In response to the multifactorial test, Mr Felman contended that it was inaccurate to focus solely on whether an individual runs their own business as a criterion for employment. He referenced the Automatic Fire Sprinklers case, which underscored the obligation for one party to personally perform the work while the other compensates for it.

Key factors bolstering Deliveroo’s argument for independent contracting included:

  • No mandatory personal performance: Mr Franco’s sole obligation, as per his supplier agreement, was to arrange for the delivery of services – he was not compelled to personally complete every task.
  • Right to delegate: Even though in practice Mr Franco did not delegate work, the theoretical capacity to do so supports a contractor classification.
  • Freedom of choice: Mr Franco was free to accept or reject delivery orders without facing immediate disciplinary action, illustrating a lack of the control typically inherent in an employment relationship.

The Issue Of Control

Mr Felman emphasised that, despite Deliveroo’s ability to monitor and terminate contracts under its supplier agreement, actual control over Mr Franco’s work was minimal:

  • Flexible working hours: Mr Franco could work whenever and wherever he wished – a flexibility not characteristic of traditional employment. Even during periods when Deliveroo employed a “self-service booking” system, there was no enforced schedule.
  • The supplier agreement: While it clearly stated that Mr Franco was a contractor, its terms were non-negotiable and imposed unilaterally, which can be less determinative than the practical realities of the relationship.
  • Lack of disciplinary action: Although performance monitoring was in place, there was no formal mechanism to discipline Mr Franco – the only consequence being termination in extreme cases.
  • Working for multiple platforms: Mr Franco routinely worked for Deliveroo, UberEats, and DoorDash simultaneously – a practice known as “multi-apping” that would be unfeasible in a traditional employment setup.
  • Choice of equipment: Deliveroo exerted no control over the type of vehicle Mr Franco used, further underscoring his operational independence.

Additional aspects, such as the requirement to invoice Deliveroo for each completed delivery and the absence of entitlements like paid holiday or sick leave, also pointed towards an independent contractor status.

Unfair Dismissal

The dismissal was deemed harsh, unjust, and unreasonable for several reasons:

  • Slow deliveries: Factual evidence of slower delivery times did not automatically justify dismissal, particularly given the lack of prior warning that this issue would be used as a basis for termination.
  • Unclear expectations: Mr Franco was not given clear performance benchmarks or notified that his delivery times were unsatisfactory.
  • Dismissal via email: The impersonal nature of the dismissal communication, which came solely in the form of an email, failed to demonstrate procedural fairness.
  • No opportunity to be heard: Mr Franco was not afforded any chance to address the performance concerns or offer a defence before the termination decision was finalised.

UK: Uber BV v Aslam

This UK case, discussed in our previous coverage here, was also referenced in Diego v Deliveroo along with other UK decisions. In Uber BV v Aslam, it was determined that the workers were drivers – not independent contractors. These international precedents highlight the challenges digital platforms pose to traditional employment definitions.

The Commissioner observed that while UK decisions do not directly dictate the outcome of the multifactorial test in Australia, they contribute to an overall picture that continues to evolve with technological advances and changing work practices.

The Changing Nature Of Work

So, what does this decision tell us in 2025? On one hand, it emphasises the need for updated laws and regulations to ensure that all workers, including those in the gig economy, enjoy fair treatment and protection. On the other, the classification of Mr Franco as an employee marks a broader shift; across the globe, courts are increasingly recognising that traditional contracting arrangements may no longer suit the modern, digitally enabled workplace.

Technology plays a central role in these changes. The Commission acknowledged that digital platforms have redefined work arrangements and that the COVID-19 pandemic accelerated shifts in performance standards. Additionally, some platforms – such as Menulog – are already moving to reclassify their workers as employees by seeking new modern awards. For further guidance on adapting to these changes, take a look at our guide on How to Start a Courier Business in Australia.

Looking ahead, as we settle into the mid-2020s, legal experts predict further refinements in gig economy legislation. New cases and potential legislative reforms are expected to clarify worker classification issues even more. For businesses and workers alike, staying informed is crucial-our resources on Employment Contracts and operating as a sole trader provide excellent guidance on navigating these evolving legal landscapes.

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