In New South Wales, it is compulsory for all employers (with a few exceptions) to have workers compensation insurance, unfortunately it doesn’t always apply to delivery and rideshare drivers. Independent contractors who work with a business rather than being employed by a business will generally not be entitled to workers compensation. Such is the case of Mr Dede Fredy and Mr Bijoy Paul, two delivery drivers for Uber Eats who were struck by vehicles in Sydney and killed in the course of their work for the company.
Delivery and rideshare drivers for companies such as Uber, DoorDash, Menulog and Deliveroo are generally considered to be independent contractors. There are no hard and fast rules as to who is considered an employee and who is an independent contractor. Rather, Australian Courts and the newly formed Personal Injury Commission in NSW must give consideration to a range of relevant factors and make a determination based on the balance of these factors. Generally speaking, a worker will be more likely to be an employee if:
- Their level of skill is relatively low and/or the business takes responsibility for the training, direction and discipline of the worker,
- They have limited control over how and when the work is performed,
- They are presented to the public as workers of the business (for example, by having branded uniforms)
- The business is responsible for “superintending” or controlling the worker’s finances, and there is limited scope for bargaining or negotiating renumeration,
- The equipment or systems needed to perform the work are provided and maintained by the business, and/or
- They perform work for the main purpose or essence of the business, rather than a corollary or additional part of the business.
These factors are summarised in the case of Hollis v Vabu Pty Ltd (2001) 207 CLR 21 (‘Vabu’). This case involved a bicycle delivery person/courier who worked for Vabu. The courier was considered an employee of the business they worked for, primarily because they had limited control over their work hours, were paid remuneration directly by the business, were required to wear a uniform with the business’s name on it and performed work in line with the main purpose of the business (delivery). This was even despite the fact that they used their own bicycle to carry out the work.
Perhaps most interestingly, the High Court considered that it may be preferable to view the relationship as an employment relationship because of the deterrence effect this would have on the business. In essence, holding the employer to account for the potential harm posed by the operation of their business (in this case, the potential for one of their couriers to injure a pedestrian) will provide that business with a tangible financial incentive to make sure their processes are designed to reduce the risk of harm. Although this specifically related to employment relationships in the context of vicarious liability (in short, the responsibility an employer has for the wrongdoing of employees), it is easy to see how this principle might be transferred to employment relationships in the context of workers compensation insurance.
Currently, drivers for more modern delivery and rideshare companies are usually presumed to be independent contractors. For example, they tend to have a lot more say over their hours and method of work than the cyclist in the case of Vabu did and are not required to wear uniforms. However, this does not mean there are no reasons to argue delivery drivers should be considered employees. They do perform work in line with the main purpose of the business, their remuneration is set and there appears to be limited scope for negotiation, and, although they need to use their own cars, drivers are required to use the apps provided by rideshare companies like Uber in order to complete their work.
In the span of two months at the end of 2020, five delivery drivers were killed on Australian roads in the course of their work. In keeping with the deterrence principle outlined by the High Court in the case of Vabu, perhaps these incidents could have been avoided if the companies they were working for were responsible for arranging their insurance, and therefore had a clear financial incentive to put systems in place to promote their workers’ safety.
The question as to whether delivery and rideshare drivers are employees or independent contractors is yet to be definitively tested in Australian Courts. There have been some moves to create an alternate scheme, such as one proposal presented to the NSW cabinet last year to add a levy to delivery orders on platforms such as Uber Eats which would serve to provide some compensation in the event a driver is killed on the job. This would apply whether the drivers are considered employees or not. This proposal, however, would still leave delivery drivers worse off than workers covered through the existing workers compensation insurance scheme, and would not provide certain benefits such as ongoing payments for dependent children left behind after workplace deaths. It is also not clear what support, if any, this scheme would provide in terms of non-fatal injuries incurred, income protection, medical expenses and other types of compensation offered by insurers under the existing scheme.
In the meantime, delivery drivers are performing dangerous jobs with limited workplace entitlements. Although there are sometimes other avenues to recover damages for personal injuries that happen at work depending on the circumstances, such as a motor vehicle accident, public liability or common law actions, the remedies are variable and are often less supportive and more difficult to navigate.
If you would like to know more about your rights regarding workers compensation as an independent contractor, we would be pleased to speak with you to advise you about your options. You can either book an appointment online or call us on (02) 4050 0330 to arrange an obligation-free consultation.
