Foodora owes $8.2m in unpaid wages, taxes

Administrators claim most delivery riders are employees, not independent contractors

Foodora owes $8.2m in unpaid wages, taxes

After closing down its Australian operations, online food delivery service Foodora has admitted it owes delivery riders, as well as Australian tax and revenue offices, $8.2m in unpaid wages, retirement contributions, and taxes.  

Berlin-based Delivery Hero, Foodora’s parent company, said last week it is willing to pay $3m of its debt, but the Transport Workers Union said it is pushing for the company to pay workers the full amount of lost remuneration.

The administrators of Foodora Australia also admitted “it is more likely than not that the majority of the delivery riders and drivers should have been classified as at least casual employees”, not as independent contractors. However, administrators recommended reviewing the situation on a case-by-case basis.

This admission marks an important break from how the gig economy generally treats workers. Rival delivery services Uber Eats and Deliveroo, for example, maintain their delivery staff on a contractual or self-employed status.

Gig workers are free to choose when to clock in but are exempt from holiday and overtime pay, bonuses, and annual leave, which tenured employees enjoy.

Foodora has also racked up $2.1m in unpaid taxes and owes New South Wales, Queensland, and Victoria close to $1m in revenue.

The delivery service has been facing allegations of underpayment and unfair dismissal before the Fair Work Ombudsman since June.

 

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