In a recent decision that has implications across the rapidly evolving gig economy, the Fair Work Commission found that Uber drivers are independent contractors and not employees. In doing so, the Commission deviated from the recent UK approach where it was found that Uber drivers were employees and therefore had rights under that country’s Employment Rights Act 1996. This decision also runs counter to the growing tendency of Australian courts to extend the notion of employment into relationships once generally accepted as being that of principal and contractor.
In Kaseris v Rasier Pacific V.O.F, Deputy President Val Gostencnik denied Mr Kaseris an unfair dismissal remedy on the basis that he was not an employee of Uber. In reaching this conclusion, the Deputy President looked at the totality of the relationship between the driver and Uber, including the level of control over the work undertaken and the contractual description of the relationship in the Services Agreement between the parties.
In confirming that the traditional test should be applied, the Commission noted that it is the role of the legislature – and not of courts and tribunals – to ensure Australian legislation evolves to protect different types of workers. Deputy President Gostencnik stated that until the law changes, the “traditional available tests of employment will continue to be applied,” although he noted that the notion using the ‘work-wages’ bargain as the minimum mutual obligation needed to establish the existence of an employment relationship may be outdated in the context of the rapidly evolving digital economy.
A 2017 Senate Report was sceptical of the lack of protections afforded to workers in “gig-companies” like Uber, and the Committee has urged parliament to change the law to ensure that all workers are protected under the Fair Work Act 2009 (Cth). While the decision in Kaseris was made by a single member of the Commission, it is currently the authority on the status of Uber drivers in Australia and it appears that for the time being at least, workers who are engaged through technology-dependent revenue sharing systems such as Uber, Deliveroo and Airtasker will be accepted by Australian Courts and Tribunals as independent contractors.
However, the Fair Work Ombudsman is currently undertaking investigations into Uber. If the Ombudsman concludes that drivers are in fact employees, Uber will find itself in breach of federal workplace laws. The outcome of these investigations will have a major bearing on the direction of employment law and its application in the digital commercial landscape.
Lessons for employers
This decision reinforces the importance of properly drafted contracts between companies and their workers that reflect the true nature of the relationship between the parties. If your organisation engages independent contractors, CIE is available to assist with the preparation of service contracts and to advise on sham contracting to minimise risks to your business.