Contractor or employee? The Australian Uber decision: guidance from the Fair Work Commission and an opportunity for reform - 23 February 2018

The Fair Work Commission (FWC) recently rejected an application for unfair dismissal brought by a Victorian Uber driver. In doing so, the decision of Michael Kaseris v Rasier Pacific V.O.F [2017] FWC 6610 provides useful guidance, in the context of the wider gig economy, on the distinction between an employee and an independent contractor.

As discussed below, the decision is unlikely to be the end of the road for these types of claims against Uber and similar online platforms like GoCatch, Airtasker, and Deliveroo.

The decision

Central to Uber’s defence was a jurisdictional claim that its drivers are independent contractors as opposed to employees. Uber represented its own services as little more than a technology platform (the App) used to facilitate transactions (trips) between other parties (the driver and the rider). Moreover, Uber has service agreements in place with each of its drivers which explicitly exclude the existence of any employment relationship in favour of an independent contractor relationship.

Of course, parties cannot alter the true nature of their relationship just by putting a different label on it. In assessing the true relationship between the parties, Deputy President Gostencnik applied the multi-factorial approach that has traditionally been utilised by the courts. The Tribunal held that Mr Kaseris:

  • exercised complete control over the hours he worked, was able to accept or refuse trips (with some limited exceptions), and was free to choose how he operated his vehicle;
  • was required to supply his own equipment (car, phone, data plan etc);
  • was able to perform any other work as and when he wished;
  • was responsible for dealing with the ATO directly in relation to GST and PAYG tax; and 
  • was not permitted to display any Uber names, logos, colours or wear uniforms while providing services.

The Tribunal also found that the essential ‘work-wages bargain’ was notably absent from the arrangement. Considering all of the above, DP Gostencnik held that all these indicia pointed towards the existence of an independent contractor relationship over an employment relationship. While perhaps not swaying the decision, it is interesting to note that Queensland and New South Wales currently require ride-share drivers to display branded window stickers.

The road ahead

As a result of the Australian Uber decision, pure software platforms like Uber will likely continue to avoid employment-related obligations to those who utilise their services in the immediate future.For other businesses, the case highlights the importance of getting the employee vs contractor distinction correct, noting that to do so with certainty can be difficult.

As a final point, DP Gostencnik’s decision was careful to note that the current ‘multi-factorial’ test was developed before labour casualisation in the digital economy took hold. DP Gostencnik identified the potential for employment law reform to broaden protections for those participating in the gig economy by better addressing the relative bargaining power of the parties.

However, such a change is something the FWC considered best left to parliament.

For more information or discussion, please contact Partner, Andrew Tobin from HopgoodGanim Lawyers’ Industrial and Employment Law team. 

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