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We previously talked about the Employment Court judgement that determined four Uber and Uber Eats drivers were employees rather than contractors.

This decision was appealed by Uber. In the landmark judgement of Raiser Operations BV (Uber) v E Tū Inc [2024] NZCA 403, the Court of Appeal dismissed Uber’s appeal and affirmed that the four drivers were employees not independent contractors.

The Court of Appeal affirmed the test set out in the Supreme Court case of Bryson v Three Foot Six Ltd [2005] NZSC 34. This requires that the Court considers all relevant matters under section 6(3) of the Employment Relations Act, which includes:

• The intention of the parties within the relationship
• The control test – which considers the degree of control exercised by the company or the business and whether the worker has independence
• Integration – whether the work performed is fundamental to the business and how integrated the worker is
• The fundamental test – whether a person is effectively working on their own account i.e. looking at the economic reality.

The “real nature of the relationship” was that the drivers were employees of Uber when they were logged into the Uber driver app. They were not carrying on their own independent transport service businesses during these periods.

The Court of Appeal found that when the agreement between Uber and the four drivers was reviewed against the reality of the relationship, the provisions are designed to confirm independent contractor status were “window dressing”. The agreement did not reflect the reality of the relationship, which was that Uber has a high level of unilateral control over the drivers.

Once deemed an employee, the worker can access minimum employment entitlements, such as the minimum wage, minimum hours of work, rest and meal breaks, holidays, parental leave, family violence leave, bereavement leave and the ability to pursue a personal grievance. There are also tax implications in the relationship changing.

While the judgment relates specifically to the four drivers seeking the declaration, some 900 Uber drivers who are members of First Union Inc, have filed minimum entitlement proceedings in the Employment Relations Authority, all of which rely on the Court of Appeal decision.

Additionally, there will be a broader impact for the approximately 6,000 drivers engaged by Uber in New Zealand given apparent uniformity in the way in which the business operates and the framework in which the drivers are engaged.

Message for Employers

If you have not had your independent contractor arrangements reviewed recently, the risk of challenge in the current landscape is significant. We recommend seeking advice on these arrangements to ensure the relationship is accurately reflected.

There is the possibility of reform in this space. In June this year, the Minister for Workplace Relations and Safety began consulting on the National-ACT coalition agreement to maintain a so-called ‘status quo’ through proposed future legislation which would prevent contractors who sign up for a contract for services from challenging their employment status in the employment jurisdiction.

There are also some indications that Uber may challenge the Court of Appeal’s decision in the Supreme Court. We will keep you updated of any developments in this space.

Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.

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