Appeal on a question of law against Employment Court finding that Uber drivers are employees– Employment Relations Act 2000, ss 3, 6 – logical starting point for the s 6 inquiry – assessment of the relationship as a matter of substance and reality – relevance of labels and “window-dressing” provisions – relevance of subjective intentions of the parties – nature and extent of control exercised by Uber – integration into Uber’s business? – are drivers carrying on a business on their own account or working in Uber’s business?
Rasier Operations BV v E Tū Incorporated [2024] NZCA 403
Uber operates two platform businesses in New Zealand: the “Rides” platform for transportation services and the “Eats” platform for food delivery services.
Uber contracts with drivers who provide these services through the Uber app. There are approximately 6,000 Uber drivers in New Zealand.
E Tū and First Union applied to the Employment Court for declarations that four Uber drivers were employees. Uber contended that they were contractors who operate their own transportation service businesses, providing transportation services not to Uber, but to the “riders” and “eaters” who use the platforms.
The case turns on the interpretation of s 6 Employment Relations Act 2000 which defines the meaning of ‘employee’. The Supreme Court provided authoritative guidance on the approach required by s 6 in Bryson v Three Foot Six Ltd.
The Chief Judge of the Employment Court determined that the Uber drivers were employees. In her decision, she focussed on the vulnerability of the drivers and posed the question “who was working for whose interests?”.
Uber was granted leave to appeal on questions of law.
The Court of Appeal held that the Chief Judge had materially misdirected herself in relation to the test in s 6 of the Act, through focussing on vulnerability as a relevant factor, failing to take as a starting point for the inquiry the relevant contractual documents and in her approach to the common law tests of control, integration and the fundamental test of whether the contracted person is effectively working on their own account.
Rather than refer the matter back to the Employment Court for reconsideration under s 215 of the Act, the court acceded to the parties’ request to apply the s 6 test directly to determine the issue of whether, despite the misdirections, the Employment Court nonetheless arrived at the right answer.
In this assessment, the court examined the contractual documents in the “Rides” business (which are attached as an appendix to the judgment), describing them as complex and sophisticated documents that are put to drivers on a take-it-or-leave- it basis with no scope for negotiation.
The contractual documents included label provisions – asserting that there is no employment or independent contractor relationship, and provisions described by the court as “window-dressing” – designed to convey the impression that the relationship differs from what it is as a matter of substance and reality.
An example of one such provision is a statement that Uber shall not be deemed to control or direct drivers.
Applicable principles: Employment Relations Act 2000, ss 3, 6 – contractual documents the logical starting point for the s 6 inquiry – assessment of the relationship as a matter of substance and reality (setting aside labels and “window-dressing” provisions) – are subjective intentions of the parties relevant? (no) – nature and extent of control exercised by Uber – integration into Uber’s business? – are drivers carrying on a business on their own account or working in Uber’s business?
Held: The appeal is dismissed – the conclusion reached by the Chief Judge was correct.
The Uber drivers are employees. Although the driver agreement has been crafted to avoid the appearance of an employment relationship, many of the provisions designed to point away from employee status are window-dressing and do not reflect the realities of the relationship.
Flexible working arrangements are now commonplace, and their existence does not rule out employment status. Drivers cannot in reality be said to be carrying on transport service businesses on their own account when logged into the driver app, providing services to riders referred to them by Uber for the remuneration determined by Uber and subject to the high level of control and direction that Uber exercises over the provision of services by drivers while logged in.
Note: The government has recently announced law reform in this area:
https://www.beehive.govt.nz/release/increased-certainty-contractors-coming
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