Difficulty with this distinction has arisen as a result of the owner-driver business model that is typically used by rideshare and courier companies. Uber in particular has been the subject of litigation in several jurisdictions over the status of their drivers.
In New Zealand, the Employment Court held in Arachchige v Rasier New Zealand Limited & Uber B.V that the Uber driver who brought the claim was an independent contractor, not an employee under the Employment Relations Act 2000. Our article on this case can be found here.
Uber has now found itself in the spotlight again, this time in the United Kingdom Supreme Court. The recent case of Uber BV v Aslam revolved around the employment status of Mr Aslam who worked as an Uber driver, where the UK Supreme Court was asked to determine whether he was a contractor or a worker.
“Worker” is a category unique to UK legislation and is a hybrid between employee and contractor. A worker is entitled to holiday pay, sick leave and protection from unlawful discrimination as is typical for employees, but is not entitled to unfair dismissal rights or statutory redundancy pay. We have written further about these distinctions here.
The UK Supreme Court dismissed the appeal brought by Uber, and held that Mr Aslam was a worker. Key to its finding is that although Mr Aslam was free to choose when and where he worked, he was fundamentally working for, and under contract with Uber. The facts pivotal to this finding were that Uber:
- Fixes remuneration and gives drivers little discretion;
- Restricts communication between passengers and drivers and actively prevents drivers maintaining ongoing business relationships with passengers;
- Requires drivers to accept the contractual terms dictated by Uber; and
- Exercises control over the driver by limiting the passenger information visible, performance managing the driver’s rate of acceptance of trip requests, vetting the type of car that is used, and by controlling the technology that is integral to the service.
What does this decision mean for New Zealand?
Ultimately New Zealand’s courts are bound by New Zealand legislation and are to follow legal precedents set by previous decisions in New Zealand courts. New Zealand courts will consider case law from other jurisdictions, particularly the UK, to guide analysis where the law is similar. The Employment Relations Act 2000 does not recognise “worker” as a distinct category in the way the UK equivalent (the Employment Rights Act 1996) does. For this reason, the ruling in Uber BV v Aslam is unlikely to disturb the Employment Court’s decision in Arachchige v Rasier New Zealand Limited & Uber B.V that deemed an Uber driver as a contractor under New Zealand legislation.
If you have any questions about contractors, employees, or the distinction between the two please contact the Employment Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.