Landmark New Zealand Cases Recognise Uber Drivers as Employees

It has been more than a year since two New Zealand Unions – First Union and E Tu – launched a class action in the Employment Courts on behalf of 20 Uber drivers, seeking to overturn a previous decision classifying the drivers as independent contractors.   In the original decision, the judge concluded that the drivers were not employees as they had substantive control over their earnings.

However, on appeal the court has determined that 4 Uber drivers are employees, and while the court does not have the jurisdiction to apply the decision across all drivers, there is anticipation of a  wide reaching impact in the gig sector in New Zealand and potentially abroad.

In reaching the determination, the court found that Uber did indeed exercise a high level of control over the driver’s earnings, and that the drivers were engaged in activities which were primarily in ‘Uber’s interests’.  Despite written contracts which intended for the drivers to be independent contractors, the real nature of the relationship was the primary consideration.

This contrasts with the conclusion of the Australian courts earlier this year, which afforded primacy to the written contract over the nature of the relationship and subsequent behaviour of the individuals.  

Outlook for employers:  While gig workers are the current focus of employment relationship challenges around the world, platform worker relationships are increasing in many business sectors.  Wherever employers engage specialised workers in a flexible manner there is potential for risk and debate in the definition of the employment relationship.