In contrast to a recent UK decision, Uber drivers have been classified as independent contractors by Australia’s Fair Work Commission.
By James Sanders, MST Lawyers
A 2016 decision in a UK Employment Tribunal (and the decision was subsequently upheld on appeal in 2017) determined that Uber drivers were to be recognised as ‘workers’ for legal purposes, with corresponding rights to holiday, sick pay and breaks for example.
Uber had sought to argue that its drivers were self-employed, as (amongst other arguments) they have no obligation to accept assignments from the company via its app, and are able to accept work from competitors.
In a recent Australian case, the Fair Work Commission has had to consider the same issue in Australia – whether Uber drivers are to be considered employees or independent contractors under the Fair Work Act 2009 (Cth) (the “Act”). In this case, the Uber driver brought a claim for unfair dismissal when Uber terminated his service agreement for poor performance.
Initially the Fair Work Commission dismissed the driver’s unfair dismissal claim, stating that he was not an employee covered by the Act and therefore had no entitlement to lodge an unfair dismissal claim.
The driver urged the Commission to consider the UK decision, (which had as above concluded that Uber drivers were not independent contractors). However, the Commission stated that the UK decision was of “no assistance” due to the legislation at issue being “materially different” to that which governed the present case. One of the main differences between UK and Australian law in this respect is that the UK has three categories of employment status: employees, workers and independent contractors. Australia does not currently recognise the ‘workers’ category, which falls between employees and those who are self-employed.
The Commission ultimately decided that the driver did not meet the higher hurdle of ‘employee’ and reached its decision by agreeing with Uber that the ‘wages-work bargain’ was missing from the relationship, and that the ‘multi-factorial approach to distinguishing an employee from an independent contractor’ overwhelmingly pointed away from the relationship being that of an employee/employer.
In its conclusion, the Commission noted that these determining factors were “developed and evolved at a time before the new ‘gig’ or ‘sharing’ economy’ and may be “outmoded in some senses”. It is possible that if Australian law recognised an equivalent of the UK’s ‘workers’ categorisation, that this case may have been decided differently.
As the ‘gig’ economy gathers momentum, and with the ongoing global litigation Uber is facing in relation to both the correct classification of its drivers and whether it should be classified and regulated as a taxi service, it is going to be extremely interesting to see how different countries approach these issues.