The Uber Case
- Business Central
- Oct 27, 2024
- 3 min read
Updated: Nov 5, 2024
Rasier Operations BV v E tū Inc [2024] NZCA 403 [26 August 2024]
This is the latest case in a line of cases between Uber and its drivers, essentially arguing the point as to whether the drivers are employees or contractors. This is an important distinction for a number of reasons, including holiday pay and leave entitlements, attendant liability for back pay, and the application of good faith and personal grievance provisions.
This particular judgment is from the Court of Appeal (our second highest court) and we know that Uber has commented that it intends to appeal. On that basis, we suggest that you treat this as an interim decision – at least for now.
Beginning with the outcome, we know that the Court of Appeal essentially agreed with the unions and determined that the drivers were employees. This upheld the position of the previous Employment Court decision. The judgment itself is 76 pages long and contains a number of legal tests and approaches that are familiar to us.
As a matter of law, the basic position taken by the Court is that the status (i.e. – contractor or employee) as is written in the Contract or Agreement is NOT determinative, it is merely the starting point for an examination into the actual circumstances of the relationship.
The Court did not change the law or the various legal ‘tests’ associated with this kind of ’status’ examination. In fact, the case was very much about applying the exact facts and circumstances of the four Uber drivers in question to the law as it stands.
First, it is important to note that the courts have indicated that the decision is specific to the facts and circumstances of the four Uber drivers in question – thus far. That means that the Uber business model remains unchallenged more widely – at this point. As you can imagine, a determination from the Supreme Court could likely mean wider coverage of the Uber driver community, so expect that hearing to be a significant legal undertaking.
Second, it is important to recap the fundamental legal tests and standards here. If you are seeking to determine whether a person is an employee or a contractor, then you examine the nature of the relationship as against a series of legal tests, such as:
What does the contract between the parties say?
How much control does the employer have of the alleged employee?
How integrated into the business is the alleged employee?
What is the fundamental relationship and how much freedom is afforded the alleged employee?
This brings forward issues such as:
Can you make your own hours, control your own workflow?
Can you work for other parties, competitor parties, are you incentivised to act against your freedom?
Can you create your own goodwill or business value? Could you on-sell that good will or value?
How necessary are you to the business, how integrated into the undertaking are you?
The real point here is an assessment of the fundamental nature of the relationship. On balance, does it really look and feel like a contractor relationship or is it more than that? This issue has been tested a number of times before – and will be again in this case – but the point remains that at this stage the test and standards for that assessment have not changed.
What we can take from this for certain is that the platform or gig economy is going to be closely and carefully studied during the term of this government and that change will be coming. There is clearly a movement to ensure that those people who are contracting are doing so safely and because they want to, not because they are being exploited or poorly provided for.
The nature of apps, service provision and digital platforms for connecting interested parties has clearly run ahead of our now almost 25-year-old employment law framework. While this framework has been updated and adjusted over time, the platform challenge may well be the most significant change to work and workplace protections so far this century.
Ultimately, the Uber decision will need to consider these issues and provide some clear guidance on the future of work in New Zealand and in cyberspace as we know it.