Thinking | 31 January 2018

First cab off the rank – FWC finds Uber driver is not an employee

The legal status of Uber drivers in Australia has been questioned since the ride service commenced here at the end of 2012. With Uber facing legal challenges from drivers in the US and the UK it was only a matter of time before the issue came before the Fair Work Commission (FWC).

On 4 January 2018, the FWC published its decision in Kaseris v Rasier Pacific V.O.F¹ in which it found that an Uber driver could not claim that he had been unfairly dismissed by Uber because he was an independent contractor and not an employee.

The FWC concluded that the fundamental requirement for the ‘work-wages bargain’ was missing from the relationship between the driver and Uber – Uber owed no obligation to the driver except to provide access to its software platform and to remit fares paid by customers to him. The driver was free to provide transport services when, where and to whom he saw fit without any further reference to Uber.

The FWC also weighed up the other usual indicia of employment and considered that, although Uber largely controlled the fares charged to customers and exercised some control over the driver by requiring him to comply with certain service standards, the following factors weighed in favour of an independent contractor relationship:

the driver had complete control over the way he provided the services, being able to choose when he logged onto the Uber app, what hours he wanted to work and whether to refuse or accept trip requests
the driver was responsible for providing his own vehicle and other equipment (including a mobile phone and a data plan to support the phone and to enable him to use the software that was provided by Uber) and for the maintenance and insurance of his vehicle and other equipment
he did not wear a uniform and was not permitted to use or display Uber’s logo
the driver was required to register for GST and was responsible for his own tax
the relationship was governed by a services agreement which made it clear there was no employment relationship and which described Uber acting as a payment collection agent and providing technology services and
the driver was not paid a wage but received a proportion of the fee charged for each trip he completed.

The FWC’s decision contrasts with the recent decision in the UK. The UK decision found Uber drivers were “workers” (which in the UK is a broader definition than “employees”) and unlike the FWC decision placed emphasis on the fact an Uber driver has no ability to generate business goodwill, to negotiate the terms of the relationship with the customer or to delegate work.

Although this is a first strike for Uber, given that each case must be considered on its own facts (with only some minor difference being capable of changing the outcome of cases of this nature) and in light of reports that the Fair Work Ombudsman is investigating the company’s employment practices the decision is unlikely to be the last word on this issue.

¹[2017] FWC 6610