Landmark Uber decision for ‘gig economy’ out of the UK – what does it mean for Australia?
The ‘gig economy’ is characterised by irregular task-based work. Uber and Uber Eats are two of the most well-known examples of businesses operating in the gig economy. The rise in the gig economy has raised questions of whether workers are ’employees’ or ‘independent contractors’.
Service providers have repeatedly argued that the workers are contractors. Uber has generally been successful in Australian litigation on the issue.
However, a recent decision in the UK Supreme Court may have far-reaching implications on how workers in the gig economy are classified and is likely to be persuasive on Australian courts asked to consider the issue.
Uber BV and others v Aslam and others [2021] UKSC 5
In Uber BV and others v Aslam and others, the UK Supreme Court unanimously ruled that Uber drivers should be classified as ‘workers’. This means that in the UK, Uber drivers are entitled to the minimum wage, paid holidays and sick pay.
The judgment emphasised five key aspects which justified its conclusion that the drivers were working for and under contracts with Uber:
- Drivers cannot negotiate their contracts with Uber.
- Uber sets the passenger’s fare, which the drivers cannot change.
- Uber controls the driver’s ability to accept or refuse rides.
- Uber controls the driver’s rating which can affect the driver’s ability to get rides.
- Uber restricts communication between passenger and driver.
The Supreme Court reasoned that services performed by drivers are “tightly defined and controlled”.
The position in Australia and what is next?
The UK Supreme Court held that reality of how the relationship is defined may not be reflected by the words of the contract. The Court said that the “actual agreement must be determined by examining all the circumstances, of which the written agreement is only part”. The legal test in Australia is similar.
However, the position in Australia regarding gig economy workers is not settled. The outcome of any given case depends on the individual circumstances, and there are examples that have gone both ways.
Recently, in a case involving an Uber Eats delivery driver, the Full Bench of the Fair Work Commission in Gupta v Portier Pacific; Uber Australia Pty Ltd [2020] FWCFB 1698 confirmed the approach to determining the employment relationship is not a “mechanical exercise of running through items on a checklist, but is rather a matter of obtaining the overall picture from the accumulation of detail” based on a multi-factor test. In that case, the Full Bench determined that the Uber Eats driver was not an employee.
However, in an earlier case involving a ‘Foodora’ delivery driver, Joshua Klooger v Foodora Australia Pty Ltd [2018] FWC 6836, Fair Work Commission determined that under the Foodora system, its delivery personnel were employees.
The divergence of treatment and the decision in Aslam probably means that an Australian Court will be asked to rule on the matter soon.
If you have any queries or would like further information regarding this update, please contact:
Joe Mullavey
Principal
M: 0416 794 061
E: jmullavey@pageseager.com.au
Published: 10 March 2021
