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Uber case sheds some light on the employee/independent contractor debate

31 Mar 2023

| Author: Jamie Dierick

E tū & Anor v Rasier Operations BV & Ors involved the trade union, E tū, seeking declarations of employment status on behalf of four former Uber drivers.

At issue: whether the Uber drivers could be deemed employees of Uber. For this to occur, the plaintiffs were required to fall within the definition of “employee” provided for in s 6 of the Employment Relations Act 2000 (ERA), which requires the court to determine the “real nature of the relationship”.

Applying the Supreme Court’s decision in Bryson v Three Foot Six Ltd, Chief Judge Christina Inglis looked at the “real nature” of the relationship between the workers and Uber to determine whether the Uber drivers in question were employees or independent contractors.

Ultimately, the Employment Court found the Uber drivers in question to be employees. Although the written contract between the drivers and Uber stated the drivers were independent contractors, Chief Judge Inglis was able to look past the written contract and conclude various factors revealed a high level of control and subordination, indicative of an employer/employee relationship.

The court went on to look at Uber’s operating model and decided it allowed the company to unilaterally determine contractual terms, trip costs and service fees, which aligned with their interests. Evidence also indicated that Uber incentivises work during peak times with “reward” schemes, controlling the purported flexibility and choice of the drivers.

Receiving employment status entitles the workers to the legislative minimum employment entitlements such as minimum wage, rest and meal breaks, the ability to file a personal grievance, leave entitlements and the ability to join unions and engage in collective bargaining.

The decision clarifies some of the confusion around the status of workers within changing forms of employment, particularly in the gig economy. Parties in this sector often engage in measures, usually through digital platforms, to establish structures that enable them to claim they are not the employers of the individuals performing work through their platforms and that those workers are not employees.

This case should be read in conjunction with the 2020 Employment Court decision of Arachchige v Rasier NZ Ltd and Uber BV, involving an Uber driver seeking a status of employment but was held not to be an employee of Uber. Further, the declarations of employment status concerned only the named parties in the case.

Applicable principles – employment agreements – minimum wage – hours of work – holidays and leave – personal grievance – collective bargaining – flexibility of work – employee control – integration into the business –  statutory interpretation.

Held: The Uber drivers in question were found to be employees, not independent contractors.

E Tu & Anor v Rasier Operations BV & Ors

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