Foodora workers owed $5.5 million

09 November, 2018 by
Hospitality Magazine

Foodora Australia is in hot water after administrators released a report on the company’s arrangements with riders, resulting in millions of dollars in underpayments.

Administrators Worrells Solvency and Forensic Accountants confirmed the company classified riders as independent contractors instead of employees, leaving thousands of workers out of pocket.

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“We have now reached the position that, on the basis of the information available at the date of this report, it is more likely than not that the majority of the delivery riders and drivers should have been classified as at least casual employees of the company rather than independent contractors,” reads the report.

Administrators estimate riders were underpaid $5.55 million in wages, superannuation and tax. However Foodora’s parent company Delivery Hero says it will pay just $3 million to cover its Australian debts, meaning taxpayers could be left to foot the rest of the bill under the Fair Entitlements Guarantee scheme.

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Fair Work launched legal action against Foodora in June alleging the company was engaging in sham contracting and underpayments. Two months later, Foodora confirmed the company had entered voluntary administration and would exit the Australian market.

 

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