The Supreme Court has dismissed Uber's appeal against an earlier court ruling and has agreed four drivers who brought a case against the rideshare company are employees.
Uber New Zealand – which has about 11,000 drivers – took its appeal all the way to the country's top court to challenge a 2022 Employment Court decision.
Today, the Supreme Court unanimously dismissed Uber's appeal.
The Supreme Court delivered its ruling on Uber's contract practices today, leaving the door open for contract workers to claim they are employees. (Source: 1News)
The ruling means, in certain circumstances and over time, contract workers with a sole employer can make a case they are employees.
The Supreme Court said Uber denied it hires drivers to work for hire or reward at all.
Summarising Uber's argument, it said: "Uber’s contracts with drivers and riders say that Uber only supplies the digital platform that then enables drivers and riders to connect and form their own business relationships. Uber argued that it does not itself provide passenger transport services."
The court said Uber argued "it does not control drivers". It said drivers choose their working hours and may use competitors’ platforms and that drivers "in substance operate their own businesses".
But the court unanimously dismissed Uber’s case, saying the company engages drivers to deliver passenger transport services. Uber said it was disappointed by the decision.
John Campbell: is Uber's low-pay model the future of work in NZ?
“A passenger could not reasonably be expected to think they were contracting with the driver when they got into the car,” the judges said.
They found the four drivers who initiated the case, including Wellington man Lalogafau Mea'ole Keil, were employees.
"This was because the factors pointing away from employee status (including intention, the drivers’ ability to choose their hours of work and to work for others, plus vehicle ownership) were outweighed by those pointing towards it (including integration, control and the lack of realistic ability for the drivers to develop their own Uber businesses)."
The Appeal Court previously upheld the Employment Court decision, defining the value of being an employee. It said: "Employment status is the gate through which a worker must pass before they can access a suite of statutory minimum employment entitlements, such as the minimum wage, minimum hours of work, rest and meal breaks, holidays, parental leave, domestic violence leave, bereavement leave and the ability to pursue a personal grievance."
The decision comes as the Government is separately proposing its Employment Relations Amendment Bill. It says this will increase flexibility for both contract workers and business owners but critics say it could lead to more and more workers on low pay with no holiday and sick leave.
'Disappointed' Uber says decision 'could be far reaching'
Responding to the Supreme Court decision today, Emma Foley, general manager of Uber New Zealand, said: “We are disappointed by the Court’s decision, which casts significant doubt on contracting arrangements across New Zealand. Independent contracting is a cornerstone of not just Uber but also our broader economy.”
She said hundreds of thousands of Kiwis “value the freedom and control it provides”.
Foley added: “This decision underscores the urgency of the Government’s proposed law reforms to provide workers and businesses the certainty they deserve when it comes to contracting arrangements.”
She said the implications of the decision “could be far reaching” but that “for now, this decision relates to only four drivers and delivery partners, and Uber and Uber Eats will continue to operate as normal”.
Inside the Uber economy: Are cheap rides costing drivers too much – Watch on TVNZ+
SHARE ME