Taxpayers face hefty bill for Foodora’s $8m debt
Administrators for food delivery company Foodora have found the company misclassified its casual workers as independent contractors and owes more than $8 million in wages, superannuation and tax.
Taxpayers could be left with a substantial bill after Foodora’s parent company, the Germanbased Delivery Hero, said it would pay just $3m to cover its Australian debts, despite forecasting revenues of $1.2 billion on Wednesday.
In what unions described as a “world first”, Worrells Solvency and Forensic Accountants said they had “now reached the position that … 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”.
The administrators estimated the workers are owed up to $5.54m and taxpayers might have to foot the bill by paying out more than $1.5m in owed wages through the Government’s Fair Entitlements Guarantee scheme.
“We have assumed the FEG may pay out 30 per cent of the total quantum of the casual underpaid wages calculation, being an amount of $1,577,006 in line with our investigations to date,’’ the report said.
The administrators reported that the Australian Taxation Office estimated it was owed $2.138m, Revenue NSW was owed $558,074, and revenue agencies in Victoria and Queensland would make claims totalling $400,000.
Foodora announced in August that it was pulling out of Australia, and subsequently appointed external administrators. It said it operated on the basis that the majority of its riders and drivers were contractors. Legal advice supporting the position has not been provided to the administrators.
Transport Workers Union national secretary Michael Kaine said the administrators’ finding that the workers had been misclassified was “an important day for workers, not just in Australia, but worldwide”.
“This confirms what workers and unions have been saying for years: that workers deserve rights to minimum pay, sick leave, payment when they are forced off the job because of injury, the right to collectively bargain, and the right to challenge an unfair dismissal,’’ he said.
“Despite owing over $8m in total to Australian workers and taxpayers, Delivery Hero will throw just $3m at them and hope to walk away.
“We need urgent government regulation to protect vulnerable workers and tax revenues from wealthy tech companies which don’t want to pay their way.”