Neil Sands
Uber has raised concerns that it will not be covered by a proposed law change restricting workers’ ability to challenge their employment status in court, even though it largely drafted the reform that the government is planning to adopt.
Workplace Relations Minister Brooke van Velden’s Employment Relations Amendment Bill includes a “gateway test” to determine if workers should be classed as contractors or employees.
As reported by LawNews, the test contained in the bill is almost identical to a proposal that Uber supplied to van Velden at a meeting last year.
However, in what appears to be a crucial oversight, the bill applies the test to workers operating on a direct engagement model, not the platform used by Uber.
“We propose clarification to the bill, because as it’s currently drafted, facilitation businesses, including ours, will be left out,” Uber legal counsel Cameron Loughlin told Parliament’s Education & Workforce Select Committee.
Australia-based Loughlin said Uber strongly supported measures in the bill designed to clarify the status of contractors and wanted them to apply to the rideshare giant.
“This is critical for businesses like Uber, where drivers perform work facilitated by our technology,” he said. “The facilitation model is recognised in the Land Transport Act and, under the Act, small passenger service operators include facilitators, which are defined as businesses that connect drivers and passengers by electronic means. Uber is such a facilitator.”
Loughlin also suggested the contractor provisions in the bill should apply retrospectively.
“Without it, businesses will be vulnerable to reclassification claims going back six years, applying the current uncertain law and creating an uneven playing field for new entrants to the market,” he said.
“The government has the ability to make any law apply retrospectively where it’s required to provide clarification or certainty. This is one of the rare situations envisaged by the Legislation Design & Advisory Committee guidelines where backwards-looking legal clarification is appropriate.”
‘Increased uncertainty’
Labour MP Vanushi Walters, a lawyer before entering Parliament, said she did not accept that the risk of litigation was justification for retrospective legislation.
“My sense is that certainty requires certainty of the law in a forward-going way,” she said. “I’m just not convinced that the argument’s been made to impose retrospective legislation at all.”
The bill also bars employees earning more than $180,000 from lodging unfair dismissal claims and bans the Employment Relations Authority and Employment Court from awarding remedies for personal grievances when an employee’s behaviour constitutes serious misconduct.
Catherine Stewart, convenor of The Law Association of New Zealand’s (TLANZ) Employment Law Committee, said her committee opposed the bill and the Employment Law Institute of New Zealand backed its stance.
“We are concerned that it will increase uncertainty, increase litigation, reduce access to justice and shift New Zealand’s employment relations away from the long-standing principles of fairness in employment relationships,” she told the select committee.
Reiterating concerns expressed in the TLANZ committee’s written submission, Stewart said the gateway test was a substantial departure from the current law, “which looks at substance over form”.
“In other words, what is the real nature of the relationship between the parties, rather than what does the label on the contract say under the new proposed test?
“If a written agreement is entered into that specifies a person as an independent contractor, and certain other criteria are met, they are automatically deemed to be an independent contractor. We are concerned that this oversimplifies the complex working relationships in New Zealand, where the contract or the written agreements do not always reflect the reality of what happens in the workplace.”
‘Poorly thought through’
Barrister David Fleming, another member of the TLANZ Employment Law Committee, said that by focusing so heavily on the contract signed at the beginning of an employment relationship, the gateway test was creating “a recipe for exploitation”.
Stewart said the unfair dismissal ban for high earners was “an extraordinary curtailment of legal rights and access to justice” that would put New Zealand out of step with common law jurisdictions such as the United Kingdon, Canada and Australia.
She said the personal grievance restrictions eroded judicial discretion.
“This prevents the Authority and court from assessing the overall justice in the particular circumstances of the case. It is not desirable to address employment law with a cookie-cutter type approach like this because each and every situation is different.”
Fleming provided a damning assessment of the bill.
“I’d urge you to not proceed with this current form. It’s likely to cause widespread injustice and it doesn’t appear to mesh well with existing law and frankly, a lot of the things that it contains don’t really appear to have been thought through.”
The Education & Workforce Select Committee is due to report back to Parliament on the bill by November 17.
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