Uber driver’s unfair dismissal claim deactivated by Fair Work Commission

The very beginning, the song tells us, is a very good place to start – but not all beginnings are created (or described) equally.  If you were beginning a job, you might begin by being “recruited” or “inducted” (unless the job was driving for Uber, in which case you would be “onboarded”).  And if Uber decides that a driver’s beginning will come to an end, that driver is not “dismissed”, or “terminated”, but instead “deactivated”.

These descriptions of the beginning and end are designed to assist Uber’s case that the people who drive for it are independent contractors, not employees,  In 2016, a UK employment tribunal described these descriptions as involving “resort to brand new terminology” which warranted “a degree of scepticism”.

Is that same scepticism is warranted in Australia?  If it is, it may be slower to arrive than the Uber you just ordered.  In a decision delivered shortly before Christmas, the Fair Work Commission (the Commission)  found that it had no jurisdiction to consider an unfair dismissal claim brought by a former Uber driver, because the driver was not an “employee” for the purposes of the Fair Work Act (and only “employees” are able to bring unfair dismissal claims in the Commission). Thus, the driver could not challenge the fairness of the “deactivation” (instead, the result was that his claim was deactivated, also).

The primary basis on which the Commission found that the driver was not an employee of the partnership which operates Uber in Australia was the lack of a “wages-work bargain” between Uber and the driver.  The driver, said the Commission, was not bound to perform any work “for the benefit of” Uber, and Uber was not bound to pay any wages to the driver; indeed, the Commission analysed the financial position as one in which the driver paid service fees to Uber.

So, if the work was not being provided for the benefit of Uber, and wages were not being paid by Uber, with whom was the driver making a bargain for work?  The answer must be with the rider – and indeed, this has been Uber’s argument in previous cases.  Uber says that it merely acts as the agent for a contract between driver and rider, an argument which was described in the 2016 UK decision as “a pure fiction”. Amongst other matters, the UK decision noted that driver and the rider have no ability to negotiate the terms of the fare between them (and indeed, the driver and rider are effectively strangers to one another).  The UK decision has also noted that Uber’s business model does not give the drivers an opportunity to grow a business of their own (other than “by spending more hours at the wheel”).

In the Australian case, the Commission did consider the amount of control which Uber exercised over the way in which drivers provided services, but found that these factors were not “overwhelmingly strong” when balanced against the fact that the contract between Uber and the driver did not involve “the kinds of control commonly associated with employment, principal amongst them, the obligation to attend work and to perform work when in attendance”.

The Commission concluded by noting that the legal tests which had led to the finding that the driver was not an employee may be “outmoded in some senses and are no longer reflective of our current economic circumstances”, and suggested that “perhaps the law of employment will evolve to catch pace with the evolving nature of the digital economy”.  (There is, of course, an argument that a good place for the evolution of the law of employment to begin is in decisions of the Commission).  It is also worth bearing in mind that the question of whether a worker is an employee or a contractor is important in a number of areas (not just in the specific context of unfair dismissal claims), and thus there is merit in the Commission’s further suggestion that “perhaps the legislature will” [one might say, “should”] “develop laws to refine traditional notions of employment”.

So, the Commission’s decision is not the end, nor the beginning of the end, for the debate in Australia about the status of “gig economy” workers (or the debate in Australia about the status of employees and contractors more broadly).  Is it, perhaps, the end of the beginning?  This may depend on whether the driver (who acted for himself in the Commission) can find legal assistance to activate an appeal . . .

For more on our employment law capabilities, contact Leonard Lozina or Angus Macinnis

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January 9
Employment Law