Australian Fair Work Commission decides Uber drivers are subcontractors

Contrary to the 2016 UK court decision (upheld on appeal in 2017) and court decisions in the US, Uber drivers have been classified as subcontractors by Australia’s Fair Work Commission.

The Fair Work Commission considered whether Uber drivers are employees or independent contractors under the Fair Work Act 2009 (Cth) (the Act).

An Uber driver in Victoria brought a claim for unfair dismissal when Uber terminated his service agreement for poor performance. Initially the Fair Work Commission dismissed the driver’s unfair dismissal claim, stating that he was not an employee covered by the Act and therefore could not lodge an unfair dismissal claim. The driver asked the Commission to consider the UK decision which had ruled an Uber driver was a worker for legal purposes, with rights to holiday, sick pay and work breaks.

Australian and UK legislation differ

The Commission found the UK decision was based on very different legislation to the Australian law. UK and Australian law differs because the UK has three categories of employment status: employees, workers and independent contractors, with the “worker’” category falling between employees and the self-employed.

The Commission decided that the driver was not an “employee” by agreeing with Uber that the “wages-work bargain” was missing from the relationship because Uber did not pay its drivers directly, and most of the commonly regarded employment factors did not support the relationship being that of an employee/employer.

The ‘Gig’ economy

The Commission said the traditional legal tests may be outdated in failing to consider the evolving “gig” or “sharing’” economy and workers may need greater legislative protection in the digital economy. If Australian law recognised an equivalent of the UK’s “workers” categorisation, the case may have been decided differently.

As the “gig” economy increases, and with the ongoing global litigation Uber is facing about the correct classification of its drivers and whether it should be regulated as a taxi service, it will be interesting to see how other countries decide these issues.

You can read the full decision by clicking here

 

Disclaimer

This article was written by Margaret Miller, partner at Bell Legal Group. It is general in nature, is not legal advice and must not be relied on as such. If you need assistance relating to the topics discussed, please contact Margaret to obtain advice specific to your circumstances. Call 07 5597 3366 or send an email to mmiller@belllegal.com.au