New Zealand - Court Rules Uber Drivers as Employees in Landmark Case

A historic ruling was made by the Court of Appeals in New Zealand in a case involving the contractual relationship between four Uber drivers and Uber. A decision like this is vital because there are certain rights and obligations related to employment contracts compared to being a contractor. While an employment contract includes minimum wage, working hours, rights to paid holidays, and other essential rights, a contractor does not have these rights.

In this case, the question of the contractual relationship is crucial since determining the status of workers in the gig economy can sometimes be tricky.

Facts of the Case and Court Ruling

The main question in this case was: Are Uber drivers employees under New Zealand Employment Law? The case was initially brought to the Employment Court, which ruled in favor of the four drivers in 2022, stating that Uber drivers were employees.

Uber, which operates through two different platforms in New Zealand, Uber Rides and Uber Eats, appealed against this decision in 2023, and now the Court of Appeal has made its final decision. The Court of Appeal rejected Uber's appeal, thus confirming the previous ruling of the Employment Court and the workers' status as Uber employees.

The Court of Appeal determined that while the Driver Agreement signed between Uber and drivers did not constitute an employment contract, certain aspects of the other written agreements can be referred to as ‘window-dressing’ provisions.

In this case, some misleading provisions, such as the possibility of drivers charging less than Uber’s calculated ride fee or that drivers make their own pricing decisions, did not seem logical or were not true. 

In addition, the Court of Appeal determined that Uber's level of control over drivers' app usage was closer to the employment relationship than that of the contractor. For example, drivers could not repeatedly decline ride requests because it would result in them being logged out and could even lead to the termination of the contract.

Finally, the Court of Appeal noticed that drivers are the faces of the Uber brand and are closely integrated into Uber's business operations, despite not wearing Uber uniforms or not having their cars branded as Uber cars.

Conclusion

Although this Court ruling applies only to four drivers who were parties in this case, decisions like this can have an unprecedented impact on similar cases. For example, 900 Uber drivers in New Zealand who are members of the First Union submitted their lawsuits on the same matter.

Furthermore, a ruling like this can impact the government's decision to regulate these issues further, provide additional protection for gig workers, and impose stricter rules on digital platforms. 

In the end, Courts and governments from other parts of the world might use this ruling as a guideline for any pending decisions and use this case as an example of how to regulate and deal with similar situations.

Source: Judgment of the Court of Appeal, Dentons