At present, many food delivery companies (such as UberEats and Menulog) are currently engaging their delivery drivers as independent contractors. However, Menulog is looking to change this setup and has made an application with the Fair Work Commission for a new industry award to be created specifically for the ‘on-demand delivery services industry’.
What is a Modern Award?
Under the national workplace relations system, employees can be covered by an industry or occupational Modern Award. An award is a document that sets out the minimum conditions and terms of employment e.g. rates of pay, hours of work, and allowances – this sits in conjunction with the National Employment Standards (NES) in the Fair Work Act.
There are two types of awards in the employment system – industry awards and occupational awards. An employee may be covered by an ‘industry award’ if their employer falls within a particular industry and there is coverage under that award for their role (e.g. the Restaurant Industry Award covers a range of roles in the restaurant industry including office-based roles, kitchen, and waitstaff). Alternatively, if an industry award doesn’t apply to an employee, they may be covered by an occupational award (e.g for administrative employees working in industries without coverage for such roles, the Clerks -Private Sector Award is likely to apply).
There is also a Miscellaneous Award that applies to certain employees not covered by other industry or occupational awards.
Menulog is currently trialing an employment arrangement for some of their Sydney delivery drivers. At present, there isn’t a Modern Award that specifically covers workers in the food delivery industry. In the absence of industry or occupational awards, they are currently operating under the Miscellaneous Award.
New Award Proposed
On 24 June 2021 Menulog made an application to the Fair Work Commission to:
- “make a statement that the making of a modern award to cover the On-Demand Delivery Industry is not contrary to the modern awards objective, and
- make directions for the further consideration of the application for the making of an On-Demand Delivery Industry Award.”
They define the ‘on-demand delivery industry’ as “the collection and delivery of food, beverages, goods or any other item, that are ordered by a consumer from third-party businesses that offer food, goods, and other items for sale for immediate collection and delivery on an online or application-based platform, provided that:
(a) the collection and delivery is not of the employer’s own food, beverages, goods, or other items offered by it for sale; and
(b) the employer is not in the primary business of providing general transport or delivery services at large of food, beverages, goods or any other item that has not been purchased on its online platform.”
On 21 July 2021, the Commission issued a statement in response to the application. They agreed that the uncertainty surrounding the award coverage for on-demand delivery services was a ‘threshold issue’. The Commission requested for any interested parties to set out any clarifications from Menulog regarding the coverage of the proposed award by 4 PM on 30 August 2021.
Menulog has until 4 PM on 18 October 2021 to submit any evidence regarding the ‘threshold issue’ to the Commission. Interested parties will then have until 4 PM on 29 November 2021 to put forward any evidence in response to Menulog’s submission.
At this point, it is still uncertain when and if a new industry award will be approved to cover this rapidly growing industry. If a new award is passed by the Commission it will likely have a significant impact on the on-demand delivery services industry.
You can read Menulog’s award application here.
Need further help?
If you need further help on any of the matters raised in this article please contact EI Legal.