However, all five Supreme Court justices who heard Uber’s appeal in July ruled the drivers were really employees.
Three agreed with the rationale of the Court of Appeal and Employment Court and two arrived at this conclusion for other reasons.
While the judgment only applies to the four drivers, the Workers First Union said it paved the way for thousands of union members to pursue full employment rights, including restitution for historical underpayment of wages and entitlements.
Uber New Zealand general manager Emma Foley said the judgment cast “significant doubt on contracting arrangements across New Zealand”.
She said Uber wouldn’t change the way it operated – for now at least.
Foley said the majority of drivers wanted to remain independent and the flexibility Uber provided was incompatible with the realities of traditional employment.
The details
Justices Helen Winkelmann, Joe Williams and Forrest Miller agreed with the lower courts that Uber exercised very close control over the way drivers operated. It selected their routes and monitored their performance. It exercised control while they were logged into the app, not just while they were doing a trip.
The three judges said drivers were the face of Uber’s business and the relationship between Uber and its drivers was one of “co-dependency”.
They noted drivers couldn’t influence how much work they received and what they were paid. They also didn’t have the ability to build goodwill with passengers.
Justices Susan Glazebrook and Ellen France took issue with the way the lower courts approached the case, but concluded the real nature of the relationship between Uber and the drivers was one of employment.
They noted the lack of control drivers had, how integrated they were into the Uber business and their inability to develop their own Uber businesses. They said these factors outweighed the fact that the drivers chose their hours, could work for competitors and owned their own vehicles.
The four drivers who initially took Uber to court in 2021, with the backing of Workers First Union and E tū, are Nureddin Abdurahman, Julian Ang, Bill Rama and Lalogafau Mea’ole Keil.
Updated law to provide more clarity looking ahead
There has been long-standing debate over what constitutes being an employee versus a contractor.
The Government is seeking to clarify the distinction by updating the law.
It is proposing to classify a worker as a contractor when there is a written agreement that specifies the worker:
- is an independent contractor;
- is not restricted from working for others;
- is not required to be available to work certain times or days or for a minimum period;
- is able to subcontract the work and the business does not terminate the arrangement for not accepting an additional task.
Uber said the change needed to be made urgently to provide certainty for workers and businesses.
However, the Workers First Union urged the Government not to make the change, claiming it intended to “enshrine worker misclassification in law on behalf of companies like Uber”.
The Employment Relations Amendment Bill had its first reading in Parliament in July.
Members of the Education and Workforce Select Committee are considering public submissions on the bill and will publish a report on it before Christmas.
The Supreme Court ruling on the Uber case could affect the way the new law is interpreted.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
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