Uber Drivers – Employee Or Independent Contractor?

A 2016 decision in the United Kingdom’s Employment Tribunal determined that Uber drivers were to be recognised as “workers” under the Employment Rights Act, National Minimum Wage Act and Working Time Regulation. This decision entitled the drivers to minimum entitlements which included holiday and sick pay as well as breaks.

Uber asserted, at the time, that its drivers were self-employed, as they have no obligation to accept assignments from the company via its app, and can accept work from competitors.

In a recent case, the Fair Work Commission had to consider whether Uber drivers in Australia would be regarded as employees under the Fair Work Act 2009 (Cth) (Act) or independent contractors.

In December 2017, the Fair Work Commission dismissed an Uber driver’s unfair dismissal application, stating that the Uber driver was not a National System Employee covered by the Act and therefore had no entitlement to lodge an unfair dismissal claim when his service agreement was terminated for poor performance.

The Uber driver urged the Commission to consider the UK decision. However, the Commissioner stated that the UK decision was of ‘no assistance’ due to the legislation at issue being ‘materially different’ to that which governed the case before him.

The Commissioner ultimately decided that the driver was not an employee and reached his decision by agreeing with Uber that the “wages-work bargain” was missing from the relationship and that the “multi-factorial approach to distinguishing an employee from an independent contractor” overwhelmingly pointed away from the relationship being that of an employee/employer.

In his conclusion, the Commissioner noted that these determiners were “developed and evolved at a time before the new “gig” or “sharing” economy” and may be “outmoded in some senses”.

As we move further into the “gig” economy, and with the ongoing global litigation Uber is facing in relation to both the correct classification of its drivers and whether it should be classified and regulated as a Taxi service, it is going to be extremely interesting to see how different countries classify this service.

For more information, contact our Employment Law team by email or call +61 3 8540 0200 to discuss their options.