The Employment Court has ruled that four Uber drivers, who worked in both the ride sharing and the meal delivery services, were employees rather than independent contractors (E Tū Incorporated & another v Rasier Operations BV & others [2022] NZEmpC 192).

This will have significant implications for minimum wage, holidays, sick leave, and other entitlements and protections available to employees. While this decision only relates to the four drivers whose jobs were considered in this case, there may be wider ranging implications for other Uber drivers, and for other workers generally.

The E tū union sought declarations of employment status on behalf of four Uber drivers. The selected drivers represent a cross-section of workers driving for Uber, covering those who work only for the ride share services and those who also do meal deliveries, and both long-term and newer workers.

Employment status is important, because it is the gateway to access a range of entitlements and protections which are not available to contractors. The Employment Court acknowledged that the line between employee and contractor has become blurred in recent times, saying:

“The width between the gate posts has always been important, but it is fair to say that it has assumed increased importance in light of the growing fragmentation, casualisation and globalisation of work and workforces in New Zealand. More fundamentally, new ways of working have generated a degree of uncertainty as to the continued utility of the gate posts.”

The Employment Court’s position on determining employment generally
The Employment Court began by noting that the Employment Relations Act 2000 is social legislation, designed to protect and promote societal norms. It does this by looking beyond what an agreement says, to determine the real nature of the relationship.

Chief Judge Inglis said that adopting a strictly contractual approach and determining whether the key characteristics existed “misses the central point”, that “the rights sought to be asserted by the plaintiffs are created by statute, not by contract”. Instead:

“differentiating between workers who are employed and those who are not is not susceptible to a bright line test. Returning to fundamentals is, in my view, particularly helpful when dealing with new and developing ways of working, in the context of the increased fragmentation of workplaces and the growth of atypical working arrangements. Employment relations legislation calls for an interpretative approach which acknowledges and advances the underlying social purposes of the statute. The Employment Relations Act recognises and protects employment relationships and provides a gateway to the constellation-like suite of minimum standards legislation, via s 6. It is these features which determine the prism through which any particular relationship is to be assessed.

In a nutshell the question to be asked and answered is whether s 6, construed purposively, was intended to apply to the relationship at issue when viewed realistically.”

The Employment Court confirmed that Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 remains the leading authority on section 6, and whether a worker is an employee or a contractor, but noted that Bryson “was decided almost 20 years ago, and well before employment cases involving the gig economy and technology platforms began emerging”. Chief Judge Inglis decided that:

“I do not read Bryson as requiring a narrow approach to be adopted when construing s 6, or somehow relegating its application to more traditional workplace relationships. Rather the Supreme Court made it clear that a range of non-exhaustive common law tools may appropriately be deployed when determining the “real nature of the relationship” in any particular case.”

In this case, the matters that were relevant to assessing the nature of the relationship, which incorporated features of direction, control, and integration, were:

  • the nature of the business and the way it operated in practice;
  • the effect of the business model and its operation on the workers;
  • who benefitted from the work undertaken;
  • who exercised control over the workers, the way in which the work was conducted and when and how it was conducted;
  • any indications of intention, including what can be drawn from the nature, terms and conditions of the documentation between the parties; and
  • the extent to which the workers identified as, and were identified by others as, part of the business.

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Penny Varley

Payroll Administrator