Uber drivers are employees… for now

A recent decision of the Fair Work Commission (FWC) held that Uber drivers are correctly classified as independent contractors, not employees, and are subsequently not entitled to the unfair dismissal protections within the Fair Work Act 2009 Cth (FW Act). [1]

Mr Michail Kaseris (the Applicant) alleged that he was unfairly dismissed from Rasier Pacific V.O.F (Uber) on 11 August 2017.

Rather than decide whether the dismissal was harsh, unjust or unreasonable, the FWC had to first determine whether the Applicant was an employee to be able to access the unfair dismissal jurisdiction.

Uber argued the relationship with the Applicant was missing the wage-work bargain, which is integral to an employment relationship. It also argued that it did not owe legal obligation to the Applicant other than to provide access to the app and to repay cancellation fees to riders. Deputy President Gostencnik of the FWC upheld Uber’s argument that the unfair dismissal application failed on this point alone.

Deputy President Gostencnik held that the relationship between the Applicant and Uber lacked the “fundamental elements of the employment relationship”, being:

1. The Applicant was not required to perform any work/services for the benefit of Uber. There was no contractual obligation for the Applicant to provide this service and he had the autonomy to choose how much/little work he performed; and

2. Uber did not make any payment to the Applicant, rather, the Applicant is charged a service fee by Uber for the use of its software.

Deputy President Gostencnik concluded from the above undisputed evidence that the “the work-wages bargain is plainly absent.” This led the FWC to rule that the Applicant was not classified as an employee for the purposes of s. 382 of the FW Act. The Application was dismissed.

Watch this space

Deputy President Gostencnik noted in his judgement that the ‘traditional’ notions of employment are “outmoded in some senses and are no longer reflective of our current economic circumstances.” More specifically, the tests to satisfy an employment relationship fail to account for factors such as revenue generation/sharing, bargaining power and the extent to which parties are bound to each other in relation to alternative vocations and competitors.

“Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy.”

Deputy President Gostencnik observed that the “traditional” tests of employment will remain standing in the meantime.

If you have any further questions regarding whether to classify workers as independent contractors or employees please do not hesitate to contact Nick Stevens, Megan Cant or Isabella Paganin.