Uber drivers are contractors, not employees: Fair Work Ombudsman

TWU calls for changes to the law

The Fair Work Ombudsman has concluded that Uber’s drivers are not employees of the company.

“The weight of evidence from our investigation establishes that the relationship between Uber Australia and the drivers is not an employment relationship,” said Ombudsman Sandra Parker said. “For such a relationship to exist, the courts have determined that there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer.”

“Our investigation found that Uber Australia drivers are not subject to any formal or operational obligation to perform work,” Parker said.

Uber and other companies that operate in the so-called gig economy have fought hard to avoid the obligations associated with having their workers classified as employees rather than contractors.

“Uber Australia does not require drivers to perform work at particular times and this was a key factor in our assessment that the commercial arrangement between the company and the drivers does not amount to an employment relationship,” Parker said.

“As a consequence, the Fair Work Ombudsman will not take compliance action in relation to this matter.”

Parker said the investigation “related solely to Uber Australia and was not an investigation of the gig economy more generally” and that she would continue to assess allegations of unfair work practices on a case-by-case basis.

In November last year, Foodora lost an unfair dismissal case involving one of its food delivery riders.

“In this instance, the correct characterisation of the relationship between the applicant and the respondent is that of employee and employer,” the Fair Work Commission ruled.

“The conclusion that must be drawn from the overall picture that has been obtained, was that the applicant was not carrying on a trade or business of his own, or on his own behalf, instead the applicant was working in the respondent’s business as part of that business.”

“The work of the applicant was integrated into the respondent’s business and not an independent operation. The applicant was, despite the attempt to create the existence of an independent contractor arrangement, engaged in work as a delivery rider/driver for Foodora as an employee of Foodora,” the ruling stated.

The Transport Workers’ Union described today’s decision by the Fair Work Ombudsman as “devastating for workers in the gig economy”.

“Last year we had a landmark victory when a Foodora rider won an unfair dismissal case and we know the same control factors are in play for workers in Uber and right across the gig economy,” said TWU national secretary Michael Kaine.

“If this is what our laws are guiding regulators to do then these laws are hopelessly broken and the government must act urgently to put in place rights that protect all workers.”

“In jurisdictions around the world from London to New York and Los Angeles, Uber is being held to account and faced down despite its massive lobbying efforts and bullying,” Kaine said. “Yet in Australia today it has been given the green light to continue ripping riders and drivers off, sacking them without warning or the right to appeal and ignoring their pleas to be able to earn a decent living.” 

An Uber spokesperson welcomed the Ombudsman’s announcement.

“Driver-partners tell us they value the freedom of being their own boss,” the spokespersons said. “They choose if, when and where they drive. In fact, more than 90 per cent of driver-partners in Australia tell us flexibility is the key attraction to using the Uber app.”

The spokesperson said that Uber the company “believes that everyone should have access to a set of affordable and reliable social protections, whatever category of employment they are in”, citing the announcement in December of a ‘Partner Support Package’ that includes insurance for on-trip accidents and access to counselling.

“We want to work with governments and the community to ensure Australians can access independent and flexible earning opportunities, without limiting their access to the support and security they deserve,” the spokesperson said.

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Tags Ubergig economy

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