Knowledge On Monday, 17 November, the final stage of the legal process between Uber and four of its drivers came to an end. The Supreme Court unanimously dismissed Uber’s appeal. The Supreme Court found that the four Uber drivers were employees, not independent contractors.
The Supreme Court’s Reasoning
Although the Supreme Court’s reasoning differed from that of the Employment Court and the Court of Appeal, it ultimately reached the same conclusion: the drivers in question were employees.
The Court focused on the real nature of the relationship between Uber and its drivers, considering factors such as the degree of control Uber exercised, the integration of the drivers into Uber’s business, and the economic reality of the arrangement. It held that the fact that the parties had labelled the relationship as a contract disguised the real nature of the relationship.
Implications of the Decision
While the case directly concerned only four Uber drivers, its implications are far reaching. The decision paves the way for other Uber drivers and potentially independent contractors in other industries to bring similar claims. When workers are found to be employees, they become entitled to recover unpaid holiday and public holiday pay and to benefit from the personal grievance regime, as well as other statutory employment protections.
Context and Significance
This decision comes as the Supreme Court marks the 20th anniversary of its landmark decision of Bryson v Three Foot Six Ltd, which established the test for determining whether a worker is an employee or an independent contractor. The Supreme Court relied on the principles from Bryson in reaching its decision in the Uber case.
Twenty years ago, the nature of work and the technology that supports it was very different. Mobile phones were primarily used for calling and texting, takeaways were ordered by calling the local shop, and taxis were booked by calling the local despatch office or flagging one down on the street. The world has changed dramatically since then.
A Call for Legislative Reform
The Supreme Court’s decision highlights a broader issue: the changing nature of work in the gig economy and the need for legislative reform to keep pace. While the courts can interpret and apply existing legislation, it is ultimately for Parliament to ensure that employment law reflects the realities of modern work arrangements.
In June, the Workplace Relations and Safety Minister, Brooke van Velden, introduced the Employment Relations Amendment Bill to Parliament. Among other measures, the Bill includes a gateway test designed to give businesses and workers greater certainty around the distinction between employment and contracting arrangements. If enacted, it would establish a four-part threshold which, if met, would categorically define a worker as a contractor and limit their ability to challenge that status in the Employment Relations Authority. The Bill is currently with the Select Committee, which is scheduled to report back on 24 December.
Given the changing nature of work, there have been some calls for the Government to follow Australia and introduce a “regulated worker” classification, which would provide minimum standards such as sick leave and minimum wage for employee-like contractors working in the gig economy.
20 years ago, the Bryson v Three Foot Six Ltd case sparked the Screen Industry Workers Act. We anticipate if we do not see broader legislative change there may be a similar legislation around the gig economy.
For now, however, the ‘ball is in the Government’s court’ and we will wait to see how it responds. Black Door Law will keep you posted on any updates.