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Should Uber drivers be considered employees?

Since its inception, Uber has disrupted the old taxi-based passenger distribution system. Across the economy there have been similar disruptions of established ways to do things.

 Uber picture1We have all had to reimagine how services are provided and the labour market has been no exception. Independent contractors participating in the gig economy have become only more common and the Government is considering whether they should be given more protections.

In the midst of this government review, the Employment Court has recently considered whether Uber drivers are employees and ought to have all the protections that come with that.

The driver in this case had his relationship with Uber terminated and wanted to pursue a personal grievance. However, only an employee can do so – hence his application to the Employment Court asking it to find that he was really an employee.

The man in question had been an Uber driver for four years and prior to that was a taxi driver. So he knew the industry and he knew what he was getting into. Those wanting to be Uber drivers need certain qualifications such as the appropriate driving licence, insurance, their own vehicle, and they must pass a criminal history check.

Uber did not generally direct or control the driver in the performance of his duties. The agreement he entered into with Uber specifically said the driver was not an employee, and he signed that agreement.

While working for Uber over the years, the driver accepted many passengers and rejected some. He even cancelled some requests for trips which he had earlier accepted.

His access to the Uber app was eventually deactivated by Uber after the company received a complaint from a passenger.

Uber said it investigated the complaint before deactivating him. However, the driver said he had no knowledge of the complaint and was not given any opportunity to comment on it.

The court did not make any findings on this issue. One would expect Uber to investigate a complaint. I think readers would expect the driver to be given a copy of the complaint and a chance to comment on it before the investigation concluded, as a matter of fairness. This certainly would have been the driver’s right if he had been an employee. This lack of protection is a factor driving the call for legislative change.

But the court’s role was quite simple. It had to apply New Zealand law and rely on the definition of employee in the Employment Relations Act to do that.

The court found that the driver was not an employee. He was a contractor. The written agreement said that.

But the written agreement was only part of this finding. There were several other factors which also led the court to find he was not an employee: there was no requirement to display an Uber logo or other signage; the driver could undertake other activities including with competitors of Uber; the driver provided his own tools of trade; he could work whenever he wished and he was not directed or controlled by Uber.

What do you think about what happened? Do you think a driver ought to have been given a hearing before the relationship was terminated? Or is this simply a commercial contract that either party can end on notice like any other commercial contract?

Your views are particularly important right now because the Government is considering these issues as part of its review. When a bill is introduced it will no doubt go to a select committee and that will give the public another chance to have input. In November 2019 the Government published a discussion document called Better protections for contractors.

Feedback has been received and the Government is now in decision-making mode. Eleven different options were presented for comment. One option is to create a category called dependent contractors, and provide this group with some protections. However, I am not sure that would help our Uber driver.

The travelling public seem to like the offer that Uber and other similar service providers make. They use such services a lot.

Many individuals like to provide services as contractors. In the main these arrangements work well. However, there seems to be a limited group of people who have little power and are called contractors perhaps so those paying them can avoid employer obligations.

Many would be protected by our current definition of employee and would have remedies, but some may slip through. It is those people that any change needs to be targeted at.