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Employees? Where Uber drivers fit in

Employees? Where Uber drivers fit in

Most of us know the freedom of logging on to a food delivery service app on our phones and having meals arrive thirty minutes later. The status of the deliverer rarely troubles us, but has been troubling employment law for several years. Are delivery drivers employees or independent contractors, or something else?

In a landmark ruling by the Fair Work Commission, Uber delivery drivers have been found not to be employees entitled to minimum pay and conditions because of their freedom to choose when they work.

The Commission held that Uber Eats drivers were not in an employment relationship because they controlled when they logged on the app and whether to accept delivery requests.

The case, brought by the Transport Workers Union, is the highest precedent yet in Australia on whether gig workers are employees, and differs from overseas rulings on the issue.

Interestingly (and this is where a third relationship may need be found) the decision is unusual because the full bench majority also found the couriers were not in a business relationship with Uber either, even though it found they did work for the gig company.

A terminated driver took an unfair dismissal claim, which required the commission to first decide if she was employee. Despite finding that Uber set drivers’ pay, banned delegating work and hindered the driver from having a commercial relationship with restaurants, the majority held that three factors were decisive in finding the drivers were not in an employment relationship. These factors derive from High Court authority.

Firstly, it was “entirely within” the drivers’ control as to when they logged on and for how long and they had no obligation to accept a particular delivery. Secondly, even when the driver was logged on they could, and did, accept work from other competitor food delivery apps. Thirdly, the driver was not required to wear uniform, bear company logos or otherwise represent the Uber Eats business beyond collection and delivery.

“In summary, we do not consider that Ms Gupta’s relationship with [Uber] bore a number of the usual and essential hallmarks of an employment relationship, namely a requirement to perform work at particular times or in particular circumstances, exclusivity when work is being performed, and presentation to the public as serving in the business,” the majority said (which was the president and vice president of the Commission).

The majority considered Uber had total control over payment and standards of delivery, which it enforced through a ratings system that threatened suspension or termination. But it held this was a “neutral” consideration as there was nothing unusual about enforcing quality and performance standards in both independent contractor and employee relationships.

Uber attempted to argue its drivers’ contracts were with the restaurants themselves and that Uber merely acted as an agent of the restaurant in arranging pick up and delivery, and an agent for the driver in collecting and passing on the delivery fee. However, the majority said regardless of the label, Uber paid the drivers.

The Commission held that Uber actually prevents drivers from knowing the restaurant’s name and address before accepting delivery and neither the driver nor the restaurant had any role in setting the delivery price.

Uber also approved the drivers to negotiate a lower fee, but in reality this was “entirely nugatory” and “commercially nonsensical”. The majority struggled with the usual test for locating an employment relationship and conceded there may be “some tension” between its conclusion Ms Gupta was not an employee and its finding she was not conducting a business in her own right.

The majority said that the drivers had “the capacity to develop her own independent delivery business as a result of her legal and practical right to seek and accept other types of work while performing work for Uber Eats, but chose not to”.

The other member of the three member bench agreed the driver was not an employee but also found that she did not perform delivery work for Uber as there was no “work-wages” bargain. He said: “[Uber] acts as a commercial intermediary between restaurants, customers and deliverers, from which it earns fees … deliverers use the company’s platform and pay a fee to [Uber] to do so. They thereby gain access to opportunities to undertake deliveries and receive a share of the monies paid by the customer.”

The TWU said it was considering appealing the ruling. That appeal would go to the Federal Court and then to the High Court, if leave was granted.

Ultimately, this matter can only be determined by the Parliament. For drivers to have such insecure status, as to many others in the new ‘gig economy’, it is likely that these workers will in future be ‘deemed employees’ like many others under workers compensation legislation.

It may, however, affect the price of your takeaway on Friday night.


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