This blog was co-authored by Heidi Davis, Candidate Attorney

In an October 2022 judgment, the New Zealand Employment Courts concluded that Uber drivers are employees who are entitled to the protection and benefits offered by their employment law.

This decision will encourage voices advocating for the rights of Gig workers globally to be aligned with those of more traditional employees. The Gig economy refers to modern forms of working which usually involve individuals offering services to clients through an online platform such as e-hailing, food and goods delivery, artisan matching, entertainment and ad hoc professional skills finders.

The court considered that the New Zealand codification of employee rights indicates “a statutory recognition of vulnerability based on an inherent inequality of bargaining power” and it was therefore imperative that the definition of an employee in the relevant legislation (New Zealand’s Employment Relations Act 2000) be interpreted in a purposive manner which supports the legislation’s social objectives.

This decision is worth noting by companies operating in South Africa for two key reasons. First, the two jurisdictions’ labour laws are similar in many respects. Second, currently, there is no binding authority in South Africa which has decided on the question of whether Uber drivers (nor any other specific type of Gig workers) are employees or independent contractors. An attempt to enforce the rights of Uber drivers in South Africa failed on procedural grounds.

South African and New Zealand courts are required to consider the substance of the relationship and not the label that the parties’ contract may ascribe to the arrangement. In both jurisdictions it is necessary to consider various factors when assessing a working relationship including: the control exercised by the employer, the integration of the employee and the intention of the parties in order to determine the real nature of the relationship. No one factor is conclusive.

In reaching the conclusion that the drivers were employees, the New Zealand court considered the relationship of co-dependency between Uber and the drivers, which spoke to the drivers being integrated into the Uber business, and the high degree of control Uber exerted over the drivers to be of great significance. The court found that Uber’s incentivising of work during peak times and withholding access to rewards if ratings dropped below a certain level extended beyond mere encouragement and was instead significant control exerted by Uber over the drivers.

New Zealand court found that, as Uber set the rates, collected the money paid and thereafter paid the drivers a certain amount, the drivers were in fact not operating their own businesses but were instead working for Uber’s business.

Owing to the comparability of the relevant legal principles and legislation, the New Zealand court’s judgment will be used in support of an argument that Uber drivers in South Africa may be classified as employees and extended the corresponding rights and protection.

It is important to keep in mind that the Gig economy is a broad concept and many flexible and non-traditional forms of work would still attract the label of an independent contractor, which many Gig workers prefer. In such circumstances individuals involved will have access to the increased freedom and flexibility which such arrangements offer but will not be in a position to demand, outside of a commercial negotiation, a minimum standard of labour rights and protections. The full citation of the judgment is: E TŪ INCORPORATED v RASIER OPERATIONS BV [2022] NZEmpC 192 [25 October 2022] and can be found here.

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