Food delivery business Menulog has recently commenced an application[1] in the Fair Work Commission (the Commission) to make a modern award specifically for the ‘on demand delivery services industry’. By way of a summary, the industry is said to be servicing the collection and delivery of food, beverages, goods or any other items, on an online or application-based platform. Menulog’s application perhaps follows the Commission’s decision[2] on 18 May 2021 that a Deliveroo delivery driver was an employee, and not an independent contractor as asserted by Deliveroo.
This award, if approved, would cover many familiar names – Uber Eats, Deliveroo, DoorDash, to name a few. Workers for these businesses have been historically considered as independent contractors, often working for multiple food delivery providers. If the award is approved, it may well bring delivery drivers under the coverage of an award as an employee, entitling them to minimum terms and conditions of employment, such as minimum wages.
Whilst it is too early in the piece to speculate whether the price of your late-night kebab or preferred snack (we do not discriminate against tasty treats) will rise, Menulog’s application does provide useful insight to businesses. It sets out some of the relevant considerations of the Commission, where it is asked to consider making a new modern award.
The Modern Award’s objective
The power for the Commission to make a modern award is found in section 157(1)(b) of the Fair Work Act 2009 (Cth) (the FW Act), together with powers to vary the terms of an award or revoke it entirely. A jurisdictional prerequisite to exercising these powers is the Commission must be satisfied the steps taken are necessary to achieve the ‘modern awards objective’.
The modern awards objective can be found in section 134 of the FW Act, which requires the Commission to consider, amongst other things, living standards and needs of the low paid, increasing workforce participation, providing additional remuneration for working under certain conditions, and the impact on businesses (such as productivity and employment costs).
Menulog addresses some of the matters in the modern awards objective. It was said by Menulog, amongst other things, the proposed award would increase workforce participation, as delivery drivers could be engaged as employees as opposed to independent contractors. It would assist in the regulation of the on demand industry and improve Australia’s economy.
Steps of the Commission
The Commission broadly outlined the initial steps involved prior to deciding whether a new award should be made covering an industry, which are:
- whether the employers and employees are currently covered by a modern award;
- if they are, whether that coverage meets the modern awards objective; and
- if the coverage does not meet the modern awards objective, whether the Commission should exercise its discretion to vary an existing award, in lieu of making a new one.
The Commission appeared to hold a preliminary view the Fast Food Industry Award 2010 did not apply to workers in the on demand delivery industry. Further the application of the Road Transportation and Distribution Award 2020 was also uncertain. Menulog put forward characteristics of its industry that distinguished it from the general transportation industry (e.g. different logistics, reliance on app technology, alternate span of hours), however the Commission was not satisfied these matters justified the creation of a new award. It was said the “more relevant consideration is whether the characteristics of the industry necessitate different award minimum terms and conditions” than existing awards.
There was also some helpful commentary on the terms of the Miscellaneous Award 2020. It was described by the Commission as an award that was never intended to provide comprehensive terms for a given industry or occupation. It is intended to function as a stopgap for employees to provide minimum terms and conditions of employment until a more specific award could be established.
A hearing on this matter is scheduled for late August 2021.
Tips for employers and businesses seeking to make an award
Employers and businesses in emerging industries may need to consider making an application to the Commission for the creation of an award, particularly if no current award applies to them and their employees. Having regard to Menulog’s recent application, we consider the appropriate steps to take are as follows:
Step 1 – Consider whether there is a current award which applies
- Review the terms of existing awards, taking into consideration their coverage clauses.
- Review the classifications under the awards identified, to see if they match the work performed by workers, or contemplated to be performed; and
- Consider whether the existing award covers the business and its employees.
Step 2 – Consider whether the new award is likely to meet the modern awards objective
- Gather information and statistics on the industry and its workforce;
- Assess whether the award is likely to increase workforce participation in Australia;
- Determine the impact of the new award on employment levels, inflation and sustainability, performance and competitiveness of Australia’s economy; and
- Consider other matters within the modern awards objective.
Step 3 – Consider whether an existing award can be varied in lieu of creating a new one
- Ascertain the existing award which is most similar to the business;
- Determine whether the award, if varied, could cover the business and its employees;
- Listing the characteristics of the business’ industry that distinguish it from the industries or classifications covered by the existing award; and
- Consider whether the different characteristics require a new award, or whether additional flexibility can be provided under the existing award.
At NB Lawyers – Lawyers for Employers, determining award coverage and advising on methods of engaging workers forms part of our day-to-day work. We welcome inquiries from employers in emerging industries or fields to contact us to discuss whether their industry may fall under existing awards, or whether a new award should be considered.
Contact NB Lawyers – Lawyers for Employers – we undertake and offer an obligation free consultation. Reach out via [email protected] or +61 (07) 3876 5111 to book an appointment.
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Written By
Director
NB Lawyers – Lawyers for Employers
AND
Associate
NB Lawyers – Lawyers for Employers
About the Authors
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.
Dan Chen is a lawyer at NB Lawyers, the lawyers for employers, and specialises in employment law. Dan is passionate about assisting business owners, small and large understand their obligations under Australia’s complex workplace relations system. Dan also has great experience in the Fair Work Commission and Federal Court of Australia defending Employers in unfair dismissal and General Protections claims. In addition, he is a fluent mandarin speaker.
[1] Menulog Pty Ltd [2021] FWCFB 4053
[2] Diego Franco v Deliveroo Australia Pty Ltd [2021] FWC 2818.