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August 2019 HRM magazine 37
It’s a question that’s caused many headaches: are gig
workers independent contractors or employees? For one
company, the FWO has made its decision.
BY AARON GOONREY, PARTNER, AND LUKE SCANDRETT, SENIOR ASSOCIATE,
LANDER & ROGERS' WORKPLACE RELATIONS AND SAFETY PRACTICE
he Fair Work Ombudsman (FWO)
has, after a two -year investigation,
determined that Uber d rivers in Australia
are independent contractors, not employees. Its
primary reason is that Uber's drivers do not have
a formal or operational obligation to perform
work when a job is made available to them.
While the FWO stated that the decision
relates exclusively to Uber Australia and would
not determine other gig-economy relationships,
it takes a clear position in an international
employment law debate and, despite having no
formal legal consequences, follows an approach
taken in previous cases.
The 2018 case of Pallage v Raiser Pacific
involved an unfair dismissal claim by a driver
who had entered into a series of service
agreements with Uber and its associated entity,
Raiser Pacific, and had his account deactivated
for breaching "community standards".
The Fair Work Commission (FWC) had to
determine whether Pallage was an employee,
and so eligible to protections from unfair
dismissal. The FWC analysed several unique
factors of the ‘Uber and driver’ relationship in
considering its decision, including that drivers:
• Could choose when they logged on or off
from the app.
• Could accept or refuse trips.
• Could work the hours and locations they
• Did not wear a uniform.
The FWC determined that drivers had enough
personal control over when and where they
operated, how often, who they picked up and
how they interacted with the Uber platform, to
be considered independent contractors.
Equivalent US position
Similarly, US courts have established factors
for determining employment relationships,
including whether the worker:
• Is engaged in a business.
• Has their own uniform /tools.
• Has regular remuneration set at a fixed
hourly rate or fee.
• Has a degree of control over the work and
nature of work they conduct.
• Believes, with the employer, they are entering
into a genuine employment relationship.
In April, the US National Labor Relations
Board used these factors to conclude that UberX
and UberBLACK drivers were independent
contractors. It believed the overriding feature of
the Uber system was that "on any given day, at
any free moment, drivers could decide how best
to serve their economy objectives".
Contrasting UK position
A UK decision demonstrates a willingness by
its courts to reach the opposite conclusion. The
UK Court of Appeal determined that Uber was
a 'transportation business', not a ride-sharing
service. It held that drivers were working for
Uber by providing skilled labour, allowing the
business to deliver its services and earn profits.
And so it found that Uber drivers were
entitled to at least the basic workers' rights such
as holiday and sick pay and the minimum wage.
Impacts of the decision
The FWO decision has raised concerns about
gig worker vulnerability. The Centre for Future
Work claims the average UberX driver earns
around $14.62 an hour in Australia, well below
the minimum wage ($19.49 an hour from 1
July 2019). If Uber drivers are conclusively
found to be independent contractors, they will
not be entitled to it. RideShare Drivers United
lobby group and the Transport Workers' Union
have also expressed concerns that categorising
gig-economy workers as contractors may erode
existing labour standards generally.
The FWO decision contrasts with a 2018
FWC decision against gig-economy company
Foodora. It was ordered to pay compensation
to a worker who was found to be an employee
and to have been unfairly dismissed. So it seems
the contrasting decisions from different bodies,
both here and overseas, show this area remains
one to watch. •••
The world works when talented people come together to
get a job done. Find your next great hire on indeed.com.au
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18/7/19 6:20 pm
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