In a landmark ruling last week, the labor court ruled that a group of four Uber drivers were employees, not contractors.
This means that drivers could be entitled to employment protections – namely
annual leave, sick, maternity and bereavement leave, KiwiSaver contributions, minimum wage and wrongful dismissal remedies – during the time they worked for the company. It’s a huge win for the underdog.
The ruling dates back to a three-week hearing in June where the drivers – through the E Tū and First Union unions – asked the labor court for declarations that they were employees and therefore should have legal protections under of the law on labor relations, the law on holidays. , the Pay Equity Act, the Minimum Wage Act and the Wage Protection Act.
At the time, union lawyer Peter Cranney said: “In short, the enumerated laws impose obligations on employers to decent working conditions and human dignity and are part of the fabric of neo-social society. Zeeland.”
In last week’s judgment, Chief Justice Christina Inglis considered Section 6 of the Labor Relations Act.
“This forces the court to consider the true nature of the relationship. The true nature of the relationship in this case is joint employment,” the decision reads.
She examined the nature and operation of the Uber business, the impact of the business model on the drivers, who benefited from the work, who exercised control over the work, the indications of intent between the parties and the extent to which drivers identified as and have been identified by others as part of Uber’s business.
Although Uber operated a non-traditional employment model, there was evidence that the ride-sharing company exercised significant control over drivers who worked on Uber’s behalf.
“Each of the complainant drivers was in an employment relationship while performing driving work for Uber and is entitled to a status declaration as a result,” the decision states.
Chief Justice Inglis clarified that the court lacked jurisdiction to make broader statements of employment status to include all Uber drivers.
“While a statement is attached to the individual candidate worker, it can have a wider impact, particularly where, as here, there is an apparent uniformity in the way companies operate and the framework in which drivers are hired. .
“It is up to the Court of Appeal and the Supreme Court of New Zealand to raise the bar if deemed appropriate.”
Uber has since indicated its intention to appeal the decision.
This judgment is part of a growing trend to establish better protections for entrepreneurs. In the 2020 case Leota v Parcel Express Ltd, a courier driver sued his employer to test his classification as a contractor, arguing he was performing the duties of a permanent employee.
There was the 2005 Supreme Court decision Bryson v Three Foot Six Limited, involving a model maker hired as a contractor by Three Foot Six Limited to work on The Lord of the Rings.
Bryson lost his job following a downsizing. Claiming he was an employee, rather than a contractor, would mean he could claim wrongful dismissal.
The Supreme Court upheld Bryson’s request, but emphasized that it was decided specifically on the facts and would not change the contractual landscape.
He lists three characteristics that could be taken into account when assessing the nature of the employee/employer relationship: the level of control exercised over a person; the degree of integration of this person in the company; and how fundamental they were to the business.
In the 2017 Prasad v LSG Sky Chefs case, two independent contractors from labor hire company Solutions Personnel Limited/Blue Collar Limited were found to be employees of LSF Sky Chefs Limited.
The case gave rise to the Employment Relations (Triangular Employment) Amendment Act 2019, which sought to ensure that employees employed by one employer but working under the control and direction of another would not be denied collective bargaining status or the ability to voice personal grievances.
As the so-called “big quit” rages in New Zealand and more people join the ranks of the gig economy, contracting seems more attractive as it allows for greater freedom, greater autonomy and truly flexible working conditions. But contracting also allows companies to offset projects and duties without having to secure basic employment benefits, rights and obligations.
Entrepreneurs who inadvertently fall into the realm of employee status in practice but are denied these rights and obligations get the end of the stick. And what if these contractors don’t have the backing of a union or the financial and emotional capacity to take legal action?
Although I have tried all parties involved, there is a part of me that hopes the case will go all the way to the Court of Appeals and the Supreme Court. It is then that perhaps one day a precedent will be set for broader change at all levels.
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