Some of New Zealand’s least-protected workers are stepping closer to securing the employment protections they have been seeking for the past 30 years.
A series of high-profile cases challenging the application of s 6 of the Employment Relations Act 2000 (ERA) has been heard in the Employment Relations Authority and Employment Court, highlighted the classification of workers such as couriers, Uber drivers and cleaners as contractors, which denies them minimum rights, says employment lawyer Garry Pollak.
At the same time, a tripartite working group of unions, employers, and government has recommended reform. In the meantime, socalled “contractors” are awaiting the outcome of an Employment Court hearing in Wellington where a group of Uber drivers and deliverers has asked to be called employees.
Pollak is not involved in the latest Uber case, being brought by E tu Incorporated and First Union and heard before Chief Employment Court Judge Christina Inglis last month. But it has similarities with two earlier cases that he won.
The first was brought by courier driver Mika Leota, who asked the court to classify him as an employee. The second involved a builder, Ross Barry, who despite working for just one building company was classified as a contractor. Pollak lost another similar case involving an Uber driver, but says the Wellington appellants made better witnesses.
“I am anticipating or hoping that the court will find that Uber drivers are employees in New Zealand,” says Pollak. “[If] the chief judge does find that they are employees, effectively she will be overruling her colleague Judge Holden in my case of two years ago.”
Since the Leota, Barry and first Uber cases, Pollak has represented a number of courier drivers who have made the same argument about being employees. In each case, the courier company has chosen to settle out of court and the drivers in question agreed to the settlement.
“None of the big courier companies wants its model to be tested,” Pollak says. “And the longer they can preserve this model, the greater their profitability is.” Had these cases gone to court, Pollak believes the drivers would have been found to be employees.
Chief Judge Inglis has said the Leota and Barry cases did not set precedents; they have been viewed by many lawyers as test cases.
The government has also set its sights on s 6. Its Tripartite Working Group on Better Protections for Contractors reported back to the Minister for Workplace Relations and Safety, Michael Wood, in December recommending a law change.
The working group characterised the problem as employers using contracting arrangements to undermine the government’s core labour-market objectives. In particular, “contractors” in industries such as parcel delivery and cleaning enabled employers to pay less than minimum wage and at the same time burdening workers with risks and compliance costs they were ill-equipped to bear.
The group noted that these “contractors” had no guaranteed breaks and little ability to take annual or sick leave.
The tripartite group made eight recommendations:
- A variation of the legislative definition of “employee” to include a contradistinction to someone who is genuinely in business on their own account.
- Constructing more detailed, objective and prescriptive legislative requirements for worker classification.
- Prioritising further policy work and consultation.
- Considering how business models could transition away from unlawful classification practices.
- Providing guidance and support packages.
- Allowing judicial determinations on employment status to cover other workers performing similar work for the same hiring entity under similar contractual terms.
- Exploring options that would allow for regulators to intervene without relying on an individual complainant wanting to pursue the matter.
- The definition of “employee” to be aligned across employment and tax legislation, allowing for appropriate two-way information sharing between the Inland Revenue Department and the employment regulator.
Pollak hopes the report will result in change.
“The proposal to alter s 6 and revert to its original intention is really a great achievement. And it’s interesting to note that Business New Zealand and the CTU (Council of Trade Unions) have agreed on it. Nobody’s jumping up and down saying it’s a poor effort.”
The big question is whether legislation will follow and be enacted, especially with the term of the current government heading towards an end.
The Uber case now before the Employment Court is likely to strengthen the argument for law reform. The argument is whether the drivers are totally controlled by the company at all times after they turn on their app. Although the drivers are classified as independent businesses, Uber controls the relationship with the customers.
The customer forms the contract with Uber, which then looks for a driver. The driver does not know the price or the destination when accepting the ride or delivery. Uber argues that it is a technology company not a transport company and is in the business of creating efficient markets. It argues that it does not control when and where drivers work but the court also heard that drivers need to adhere to a long list of rules and regulations set by Uber.
The case turns solely on s 6 of the Employment Relations Act, which defines the meaning of employee. As with the other cases, the court must consider the real nature of the relationship between Uber and its drivers, which has been described as servility.
Whoever wins, the case will add to the growing international body of case law involving Uber from appellate courts in France, the United Kingdom and the United States.
Two weeks ago, the Australian Transport Workers’ Union struck an agreement with Uber Australia to give workers on the platform baseline conditions. The new Labor government in Australia is looking at giving the country’s Fair Work Commission (FWC) the power to regulate employee-like forms of work. The FWC is not a court and does not have the same test as s 6. The fact the the drivers’ contracts said they were workers holds greater strength in Australia.
In the UK Uber decision, the courts agreed on a middle ground between contracting and employment status, called a “worker”. But this is not a ideal, Pollak says.
“The Parliament in the UK was persuaded to create a semblance of order out of chaos. So, it agreed on a middle version. And they gave that category of worker many rights as if they were employees. But from what I have read, it was a cop out.
“You don’t want to be a ‘worker’ in the UK. You want to be an employee. What it has led to is an enormous number of cases of workers trying to resist being categorised as workers.”
As for New Zealand, the idea that cleaners and couriers in particular run independent businesses is absurd, Pollak says.
“There’s one little gem in that Ross Barry case. I called the secretary of the A1 Union [as an] expert witness. Either I or the chief judge asked him the question about how you know on a building site who is a contractor and who isn’t?
“He said he has never had any difficulties with that. A contractor is someone who has a ute with their name on it. They come on site to do a particular task. They do it and finish and then submit an invoice, which hopefully is paid on the 20th of the month. They go from building site to building site. And they usually have an apprentice with them. That’s the common sense view [of what makes a contractor].
“[Lawyers often argue] the courier has signed this contract, it’s his choice or her choice,” Pollak says. “But that in itself is absurd because there is no other part of our legal system where somebody can elect to opt in or opt out. It’s like somebody saying: ‘oh, my client has decided they’re not going to pay income tax’. Yeah, well, that would be laughable.”
Pollak notes that the “screwed-up business model” of avoiding employment obligations is in part a construct by lawyers.
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