25 Oct 2022

Court deems Uber drivers to be employees in landmark ruling

2:07 pm on 25 October 2022
A man hand holding screenshot of Uber app in a car.

The Employment Court has deemed four Uber drivers as employees of the international ride-hailing service. Photo: 123RF

Four Uber drivers from Wellington have been deemed employees of the international ride-hailing service in a landmark Employment Court decision.

In today's judgement, Chief Judge Christina Inglis found each driver was not an independent contractor but in an employment relationship and said the decision may have a broader impact.

"Each of the plaintiff drivers was in an employment relationship when carrying out driving work for Uber and is entitled to a declaration of status accordingly."

Chief Judge Inglis noted that while such a declaration attached only to the four drivers in this case, "it may well have broader impact, particularly where, as here, there is apparent uniformity in the way in which the companies operate, and the framework under which drivers are engaged".

The case was filed in July last year and heard in Wellington.

The unions, FIRST Union and E tū, jointly sought a declaration the drivers were employees and therefore entitled to the rights and protections under New Zealand employment law. These included the minimum wage, guaranteed hours, holiday pay, sick leave, KiwiSaver contributions, the right to challenge an unfair dismissal, and the right to unionise and collectively bargain.

NZCTU President Richard Wagstaff said the ruling was a massive win.

"Everyone who works for Uber, and similar gig economy companies, deserve to be treated as employees. These drivers deserve protection under New Zealand's employment law, including pay, guaranteed hours, leave, KiwiSaver contributions, and the right to unionise."

There are 7000 Uber drivers in the country and FIRST Union strategic project coordinator Anita Rosentreter said it was now accepting these drivers as members and would initiate collective bargaining with the local arm of Uber.

The union was also acting on behalf of drivers to claim backpay for wages, holiday pay and other entitlements from the company.

"Uber has bullied its way into cities all over the world with a deliberate strategy of breaking the law and exploiting drivers - that ends here in Aotearoa today," Rosentreter said.

Wagstaff said the ruling came as unions were eagerly awaiting the response from the Government's Better Protections for Contractors workstream.

"We hope this is signal that serious action needs to be taken to better protect working people. Too many people are engaged as contractors when they should be employees."

One of the four driver witnesses in the case, Praful Rama, known as Bill Rama, said it brought justice for Uber drivers.

"This will mean drivers will have a say, not just be subject to the control of Uber," he said.

"We are employees. It's not a question of what we signed or what Uber says we are. The court has looked at the reality of our relationship with Uber and said that drivers are employees."

E tū Assistant National Secretary Rachel Mackintosh said the decision had wide-reaching implications.

"The stakes here are high - no industry is safe from being absorbed into the gig economy and, without decisions like this one, decent work is out of reach for gig workers who have little or no rights and protections," she said.

"We're even seeing gig work for the heroes of the Covid pandemic - many home support workers are now only able to pay their bills if someone swipes right."

The decision comes as the government is set to announce a crack-down on worker misclassification, out of its Better Protections for Contractors workstream.

"The government should carefully consider the application of this case to other instances of worker misclassification as well. Uber has taken this practice to new extremes, but they are by no means the only company engaging in it," Mackintosh said.

The Employment Court does not have jurisdiction to make broader declarations of employment status to include all Uber drivers.

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