New Zealand Uber drivers have won employment rights, with a historic ruling against the global private hire vehicle (PHV) operator arriving the morning after Labour Day.
Following similar examples in the UK and France, New Zealand’s Employment Court found that four current and former Uber drivers were employees, not independent contractors, in a case jointly taken by and E tū and FIRST Union.
The judgment, which sought a declaration of employment status for the four drivers, found that “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”, noting that while such a declaration attaches only to the individual applicants of the 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.”
Anita Rosentreter, FIRST Union strategic project coordinator, said: “This is a landmark legal decision not just for Aotearoa but also internationally – what a way to finish Labour weekend!
“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.”
The case was filed in July 2021 and heard in the Employment Court in Wellington by Chief Judge Christina Inglis in 2022.
The unions representing the drivers sought a declaration that they were employees and therefore entitled to the rights and protections under New Zealand employment law, including 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.
The four driver witnesses in the case were Julian Ang, Mea’ole Keil, Nureddin Abdurahman, and Praful “Bill” Rama.
Rama said: “Finally, there is justice for Uber drivers. This will mean drivers will have a say, not just be subject to the control of Uber.
“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.”
Rosentreter said that in light of the verdict, FIRST Union was now accepting Uber drivers as members and would immediately move to initiate collective bargaining with the company. The union is also acting on behalf of drivers to claim backpay for wages, holiday pay and other entitlements from Uber.
There are more than 7,000 Uber drivers in New Zealand, but the misclassification of workers is seen as increasingly common in other industries too, like construction and care work.
E tū Assistant National Secretary Rachel Mackintosh said the decision has wide-reaching implications. Mackintosh said: “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.
“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.”
What exactly did the courts find?
The Chief Judge of the Employment Court (Chief Judge Christina Inglis) found that all four drivers were employees of Uber during the periods where they performed transportation services.
In the decision reached on 25 October the Employment Court accepted that some of the usual indicators of a traditional employment relationship were missing. However, it was found that significant control was exerted on drivers in other ways, including via incentive schemes that reward consistency and quality and withdrawal of rewards for breaches of Uber’s Guidelines or for slips in quality levels, measured by user ratings.
Uber collectively had sole discretion to control prices, service requirements, guidelines, terms and conditions as well as other aspects of the business such as marketing. Drivers were restricted from forming their own relationships with riders or from organising substitute drivers to perform services on their behalf.
The Court found that in reality Uber exercised significant control over each of the drivers. While the means via which the control was exercised are not generally associated with a traditional workplace, the underlying point remains the same: “Uber was able to exercise significant control because of the subordinate position each of the plaintiff drivers was in and which its operating model was designed to facilitate and did facilitate.”
The Court considered that the evidence pointed to Uber running a transportation business, not merely a digital platform that facilitates interactions between drivers and passengers. It held that the drivers worked for that business; it was not simply a commercial arrangement; and they did not run a business of their own.
Uber was entitled to form a complex structure with five interrelated corporate entities. The ride sharing and meal delivery services were each operated by two separate entities. The Court found that an employee may have more than one employer and that an employer may be more than one corporate entity: declarations were made to that effect.
Interestingly this judgment does not have immediate legal effect on any Uber driver other than the four specified drivers who sought declarations from the Court. However, because of the apparent uniformity of the defendants’ operation, the judgment may have a broader potential impact on other Uber drivers.