Uber fights to have drivers seen as contractors, not employees

Uber has argued it does not have as much control over drivers as the unions suggest, and wants a judgment ruling that drivers are employees and not contractors set aside and sent back to the Employment Court.

The 2022 ruling followed a three-week hearing in which four drivers sought to be classified as employees under section 6 of the Employment Relations Act.

They argued Uber’s misclassification of them as contractors denied them the minimum wage, holiday pay, protection from unjust dismissal, KiwiSaver contributions, and the right to unionise and collectively bargain.

The judgment by chief Employment Court judge Christina Inglis, to confirm their claim as employees, threw the gate open for other drivers to then seek the protections of employment law.

But lawyer for Uber Paul Wicks KC told the Court of Appeal on Tuesday Inglis had failed to consider the lack of control Uber had in this relationship.

“Each driver had complete flexibility and choice over when they worked, for how long and where, and that freedom is wholly different to an employment relationship, which is typically structured around a clear obligation to work certain hours. 

“They had other work commitments and chose to log on to the Uber app when and where it suited them.”

He said Inglis had also failed to appropriately consider the intention of the drivers when they signed up to work for Uber, arguing drivers knew what they were getting into.

But most importantly, Wicks said Inglis had started in the wrong place – putting too much weight on the drivers’ vulnerability and using this to tip the scales towards them being deemed employees.

“The Employment Relations Act serves a social purpose, but only when limited to employer relationships. The social purpose being to protect employees properly classified, not to protect workers by making them employees. 

“The starting point was incorrect. Section 6 of the Act should not be interpreted on a broad basis with a particular emphasis on vulnerability.”

The appeal is defended by unions representing the drivers – First Union and E Tu.

Union lawyer Peter Cranney, who represented the drivers in the Employment Court, said any terms referred to as “freedom” for drivers, were not.

“The actual contractual relationship is that Uber can do what it likes.”

“The most important element is that Uber determines completely the price of the trip. Completely. And in relation to the so-called driver-passenger contract, if there is one, it’s a very strange contract because every aspect of it is decided by Uber not the passenger. 

“Everything is determined by someone who is not a party to the contract … and that’s because the contract is a fiction.”

Cranney will continue his submissions tomorrow.

The appeal comes as Parliament also looks to make changes in this space. 

Workplace Relations Minister Brooke van Velden recently confirmed her intention to close the door on contractors seeking to be classified an employees.

“This Government wishes to ensure businesses and workers who explicitly agree to a contracting arrangement have certainty about the nature of that relationship,” she told the Auckland Business Chamber earlier this month.

“The legal status quo has created uncertainty for contractors and businesses because of contractors’ ability to challenge their employment status if they believe they should be classified as employees.

“So, I have asked my officials for advice on policy options to increase certainty in contracting relationships. I want to achieve certainty for contracting parties, so that their intent when entering into a contract for services is upheld.”

Early last year, then-Prime Minister Chris Hipkins put work in this space on hold, saying the Government was “deferring” consultation until “all appeals of the case are heard”.