Uber Drivers Confirmed as Employees: Supreme Court Dismisses Appeal

The Supreme Court has upheld earlier rulings that Uber drivers in New Zealand are employees under the Employment Relations Act 2000 (ERA), dismissing Uber’s appeal and affirming the Employment Court and Court of Appeal decisions.

The case centred on whether four Uber drivers were employees under the ERA. The Employment Court and Court of Appeal had previously ruled that the drivers were employees when logged into the Uber Driver app. Uber appealed, arguing it merely provided a technology platform and that drivers were independent contractors.

Key Points of the Judgment

• Real Nature of Relationship: Uber’s contractual terms describing drivers as independent contractors were “window-dressing” and did not reflect reality. Uber exercises significant control over drivers through pricing, performance standards, ratings, and disciplinary processes.
• Integration: Drivers are integral to Uber’s business of providing passenger transport services. Despite owning their vehicles and choosing when to work, they lack meaningful autonomy over fares, customer relationships, and service terms.
• Common Law Tests Applied: Using the tests of control, integration, and the fundamental test, the Court concluded drivers are not in business on their own account.
• Inequality of Bargaining Power: Statutory protections exist because workers often cannot negotiate terms, making contractual labels non-determinative.
• Outcome: Uber must pay costs of $50,000 plus disbursements.

Similar rulings have emerged globally, including the UK Supreme Court’s decision in Uber BV v Aslam and recent Australian High Court cases. While legislative frameworks differ, courts consistently emphasise practical realities over contractual labels.

Key Takeaways

• Contractual Labels Are Not Determinative: Courts will look at the real nature of the relationship, not just what the contract says.
• Control and Integration Are Key: If your business sets pricing, monitors performance, or restricts autonomy, workers may be employees.
• Minimum Entitlements Apply: Employees are entitled to minimum wage, holiday pay, and leave, even in flexible or gig arrangements.
• Audit Contractor Agreements: Regularly review gig and contractor arrangements for compliance with the Employment Relations Act.
• Prepare for Change: Expect possible legislative reforms introducing clearer definitions or intermediate worker categories, and watch this space for progression of the Contractor Gateway law currently working through the legislative process. Read our article on this here

Disclaimer: We remind you that while this article provides commentary on employment law topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek guidance from your employment lawyer for any questions specific to your workplace.