3 days ago
Gig economy on trial as Uber fights drivers' employee status
A gig is only as good as the contract and the client. Contracting traditionally offers fewer legal protections and financial security.
We're talking no annual leave, KiwiSaver (another blow with the latest government contribution reduction slashed to $251 from $521 a year), sick days, maternity or bereavement leave, minimum wage, breaks, and few options for recourse if you're unfairly given the boot.
Contracting can be a win-win for employers wanting to outsource the work without strings attached, but like any romantic 'situationship', power imbalances and lopsided cost-benefit splits can leave you out in the cold.
That's especially true for the four Uber drivers now fighting for employee status in the Supreme Court.
How did we get here?
The case dates back to a landmark Employment Court decision in 2022. The contractors, through unions E Tū and First Union, sought 'employee' status prescribed in the Employment Relations Act.
At the time, Chief Judge Christina Inglis considered the nature of the relationship, who called the shots, who profited, what both sides intended, and whether the drivers were genuinely seen as part of Uber's business.
Despite the unorthodox employment model, Chief Judge Inglis rejected Uber's claims that it merely facilitated rides, concluding the company '... creates, dictates, and manages the circumstances under which its business is carried out, and driver labour is deployed in order to grow that business'.
Same same, but different
Enter the Court of Appeal decision released last year, which also found in favour of the drivers, but disagreed with the Employment Court's emphasis on the workers' vulnerability.
Instead, it took the Supreme Court's Bryson v Three Foot Six approach. It compared the contractual terms with the reality on the ground, asking: How much control did Uber exercise? How integrated were the drivers into the business? Could they meaningfully operate on their own account?
First, the court found the Uber-directed contract was offered on a 'take it or leave it basis with no scope for negotiation'. Clauses designed to steer away from employee status were, in Justice Lowell Goddard's words, 'window dressing'.
In practice, Uber controlled almost everything: fares, terms, conditions, complaints and customer contact. Drivers could not negotiate prices or reject too many rides without being penalised, and they had no way to build goodwill of their own, the court found.
Sure, they provided their own cars and phones, picked their hours and wore mufti, but this did not outweigh Uber's control or how integral drivers were to the business. No drivers, no rides, no Uber.
Let a good thing lie
In my view, this was a win for the underdog, with the potential to open the door for all drivers and gig workers to ask whether they too, are entitled to minimum rights. Great for worker bees but not so great for business.
It's therefore no surprise we are now at the Supreme Court, where Uber has warned that the court risks rewriting the rules for 20% of the workforce, consequently increasing compliance costs.
Uber claims that the court should adhere to the contract and its underlying intentions. Yes, Uber sets quality standards and prices, but drivers also determine when and where to log in, which jobs to take, and cover costs.
Conversely, the drivers contend that the contract is the baseline; the law was never meant for fine print to mask the true nature of the daily grind. They argue that the real essence of the model depends on control and subordination, not genuine independence.
Where to from here?
As we wait with bated breath for the Supreme Court's decision, it may already be too late for contractors suffering under the weight of big business.
Enter the Government's Employment Relations Amendment Bill, introduced last month. The new 'gateway' test promises, in the words of Workplace Relations and Safety Minister Brooke van Velden, to 'provide greater certainty for all parties and allow more innovative business models'.
Under the proposal, a worker will be excluded from the definition of 'employee' if all the conditions are met: the contract must specify independent contractor status, they can freely work for others, they are not required to work set times (or can subcontract), they can't be fired for turning down extra tasks, and they must have time to review the deal.
If the contract's signed, sealed and delivered, even a 'take it or leave it' deal might lock you out of your rights for good. And who said romance was dead?
