4 New Zealand Uber Drivers Declared Employees in Landmark Ruling

In a landmark judgement in favour of four New Zealand Uber drivers, the country’s Employment Court ruled on Tuesday that they are employees of the company and not independent contractors.

The global ridesharing company immediately announced that it would appeal the decision, which also entitles the drivers to rights and protection under the New Zealand employment law, including the minimum wage, guaranteed hours, holiday pay, sick leave, the right to challenge an unfair dismissal and the right to unionise and collectively bargain, The New Zealand Herald reported.

The four drivers—Julian Ang, Mea’ole Keil, Nureddin Abdurahman and Praful ‘Bill’’ Rama—took Uber to the court through unions E Tū and First Union asking for a declaration that said they were employees.

Ruling that the drivers were not running their own businesses and they effectively served as Uber employees, Chief Judge Christina Inglis observed: “Uber is the only party running a business. It is in charge of marketing, pricing and setting the terms and nature of the service provided to riders, restaurants and eaters.”

Uber “creates, dictates and manages the circumstances under which its business is carried out, and driver labour is deployed in order to grow that business”, Judge Inglis further observed.

“The plaintiff drivers were required to provide their labour with due skill, care and diligence, and to maintain high standards of professionalism, service and courtesy – all set and enforced by Uber. All of which points firmly towards an employment relationship.”

Employment status was described as the gate through which a worker must pass before they could access a suite of legislative minimum employment entitlements, such as minimum wage, minimum work hours, rest and meal breaks, holidays, parental leave, domestic violence leave, bereavement leave, and the ability to pursue a personal grievance, the court said.

It was also the “gateway to union membership and collective bargaining, and the gate through which the labour inspector must pass before taking action on behalf of a worker or against a workplace”.

“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,” Judge Inglis said noting that similar declarations of employment status had been advanced in other jurisdictions with mixed results.

In concluding that each of the plaintiff drivers was in an employment relationship when carrying out driving work for Uber and was therefore entitled to a declaration of status, Judge Inglis said that globally, such (digitally run) platforms are becoming increasingly commonplace and New Zealand is no exception.

Though the ruling applies specifically to the four drivers, the court noted that it could have a broader impact. “It follows that there is no immediate legal impact in relation to other Uber drivers. In other words, they do not, as a result of this judgment, instantly become employees,” Judge Inglis said.

However, the ruling “may well have a broader impact, particularly where, as here, there is apparent uniformity in the way in which the companies operate, and the framework under which drivers are engaged”, the Judge said.

“This is a landmark legal decision not just for Aotearoa [Māori-language name for New Zealand] but also internationally. “Uber has bullied its way into cities all over the world—that ends here in Aotearoa today,” First Union strategic project coordinator Anita Rosentreter said in a statement.

Praful Rama, one of the Uber drivers, said in a statement: “Finally, there is justice for Uber drivers. This will mean drivers will have a say, not just be subject to the control of Uber. We are employees.”

A spokesperson for Uber said the company was “disappointed” and would be appealing against the decision. They said it was “too soon to speculate” on whether New Zealand’s drivers having employee status would affect the company’s operations in the country more broadly.

Richard Wagstaff, of the New Zealand Council of Trade Union, said the ruling is “a massive win”. “These drivers deserve protection under New Zealand’s employment law, including pay, guaranteed hours, leave, KiwiSaver contributions and the right to unionise.”

Workplace Relations minister Michael Wood said that though the ruling appears significant, the broader implications need to be considered further.

“What it clearly does point to is this area and the law about who’s an employee and who’s a contractor. I have a view and the government has a view that there are cases of misclassification out there. That’s why we’ve started work around reform in this area to make sure that employees who really are employees are classified in the right way,” Wood said.

Terming the decision “disappointing”, particularly considering the same court in 2020 had ruled that a rideshare driver using the Uber app is not an employee, Danny Cowan, Uber spokesperson for Uber in Australia and New Zealand, told Open Justice said that it would appeal the decision. “We are reviewing the decision in detail and will be filing an appeal.

Wagstaff told Open Justice that Uber’s decision to appeal the ruling is disappointing. “It will delay justice for these workers.”

Uber acknowledged that the ruling underscored the need for industry-wide minimum standards for on-demand work and that it is committed to improving standards for all independent workers, across all platforms, but it is equally important to preserve the flexibility and autonomy that drivers said was important to them.

“Kiwi drivers consistently tell us that the flexibility that comes with driving with Uber is what they value most,” Cowan said. “We will continue to work collaboratively with industry and the New Zealand government throughout the contractor policy reform process.”

The ruling follows a series of international cases where workers have taken gig economy companies to court to fight for employment rights.

According to The Guardian, a 2021 analysis showed gig economy companies like Uber and Deliveroo had faced, at least, 40 major legal challenges in 20 countries, including Australia, Chile, Brazil, South Korea, Canada and across Europe.

In Italy in 2021, authorities fined UberEats, Glovo, Just Eat, and Deliveroo €733m for misclassifying 60,000 couriers. In the UK, the Supreme Court upheld a ruling last year that Uber’s drivers should be classified as workers rather than independent contractors.