Uber drivers not employees according to the Fair Work Commission

WHO SHOULD READ THIS

• Businesses that engage people to perform work in temporary positions or short term arrangements.

THINGS YOU NEED TO KNOW

• The distinction between employment and other contracting arrangements can have a significant impact on the obligations and penalties that businesses are exposed to.

WHAT YOU NEED TO DO

• Although there is no silver bullet to prevent a worker claiming that they are in fact an employee, employers can carefully assess any engagement entered into with someone who will provide work and have the terms of the relationship set out in an agreement.

On the first occasion the Fair Work Commission (FWC) has conducted a serious examination of Uber’s operations, the FWC has found that Uber drivers are subcontractors, not employees.

Background

Despite support for Uber drivers being employees in both the United Kingdom and United States jurisdictions, Deputy President Val Gostencnik has rejected a Victorian Uber driver’s bid to establish he was an employee and therefore protected from unfair dismissal.

The FWC examined the relationship against the traditional indicia of control, exclusivity of work, and the workers provision of their own tools of trade and found that while Uber exercises control over fares, including minimum trip fees and surge pricing, most of the commonly regarded employment indicia were missing.

The FWC accepted that Uber makes no direct payment to its drivers so that the ‘work for wages bargain’ fundamental to employment, is also absent. The FWC also noted that drivers have control over when, where and for who they work and are under no contractual obligation to perform work for Uber.

Decision

The decision is a rare win for the ride-sharing company, which has faced a number of adverse decisions overseas where drivers were found to be employees entitled to benefits including minimum wage standards and paid leave.

In handing down the decision, the Deputy President reflected that traditional legal tests may be out-dated in their failure to account for an evolving digital economy in which temporary positions and short term engagements are common.

‘Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy. But until then, the traditional tests of employment will continue to be applied.’

The decision is expected to be appealed. Click here to read the full decision.

If you would like further information on this matter please contact a member of the Employment Relations and Safety team. With the expansion of our Employment Relations and Safety practice into Sydney, we would like to introduce you to Partner Scarlet Reid and her specialist team, including Senior Associates Tom Reaburn and Nathan Roberts. Find out more about the Employment Relations and Safety team here.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.