Reports are circulating that food delivery company Foodora intends to quit its Australian operation and will close up shop before the end of the month.
According to the ABC, Foodora said in a statement that the reason for its Australian closure was to shift its focus towards other “higher potential” growth markets.
It said that Foodora has been competing against businesses like Uber Eats and Deliveroo, and that the company would ensure that employees, support partners and contractors will have suitable alternative roles.
Earlier, My Business reported that Foodora had been taken to court amid allegations of “sham contracting activity” against workers.
The Fair Work Ombudsman (FWO) filed action against Foodora in the Federal Court, pertaining to three delivery workers engaged in 2015 who worked for the company in 2016.
Foodora allegedly misrepresented its terms of employment, telling two bicycle delivery riders in Melbourne and one driver in Sydney that they were independent contractors when, in fact, they were direct employees of Foodora.
Having tested the validity of these contracts, the FWO is alleging that the individuals should have been classified as employees.
If found guilty of the FWO allegations, Foodora could face penalties of up to $54,000 for each breach, in addition to repaying the trio in award wage entitlements, casual loading and superannuation.
More to follow.