Food delivery company Foodora is being taken to the Federal Court over allegations it underpaid employees on sham contracts.
Bicycle-based food delivery company Foodora faces thousands of dollars in fines after it allegedly put riders and a driver on sham contracts.
The ombudsman has filed an action in the Federal Court alleging the three workers in 2015 and 2016 were presented as independent contractors when they actually did the work of permanent employees.
The two Melbourne riders were aged 19 at the time, while the Sydney driver, an Indian migrant who is now an Australian permanent resident, was aged 30.
The ombudsman alleges they signed "Independent Contractor Agreements" but actually did the work of employees.
"Courts have found again and again that merely labelling the relationship to be one of independent contracting does not make it so," Fair Work Ombudsman Natalie James said on Tuesday.
"The activity of delivering food from restaurants and fast food outlets to customers is not new, and nor is the 'test' for what determines who is and is not an employee entitled to award rates."
The workers were underpaid $1620 over four weeks, but Foodora could be fined $54,000 for each breach of the law.
Workplace Minister Craig Laundy says the court action is a reminder to businesses operating on digital platforms to categorise workers correctly.
"There are clear provisions in the Fair Work Act that protect against sham contracting and breaches of modern awards," Mr Laundy said.
The ombudsman wants a court order requiring Foodora to back-pay the workers in full and make superannuation contributions on their behalf.
A case management hearing has been scheduled in the Federal Court in Sydney for July 10.