June 2019

Uber drivers aren't employees, according to the Ombudsman

The Fair Work Ombudsman has completed its review of Uber's operations in Australia.  It has decided that Uber drivers are not employees, and as such, aren't entitled to employment-related entitlements.

This isn't a Court decision, so there could always be future claims to come from individual drivers.  Still, it means the regulator won't itself commence proceedings against the ride-share giant for non-compliance with Australia's employment laws, and that is big.  It put to an end the ‘threat’ hanging over Uber.

The Ombudsman, Sandra Parker, announced that the decision was made after examining evidence including drivers’ contracts, log on and log off records, interviews with drivers and Uber Australia, ABN documents, payment statements, banking records and pricing schedules.

In reaching its decision, the Ombudsman appears to have placed a focus on the ability of Uber drivers to reject work, which tends to show a level of individual control that is distinct from employment.  But be careful, because that could also suggest casual employment.  After all, casual employees are also free to accept or reject work.

There are a number of other features of the Uber relationship that tell against employment, including the fact that the drivers have the capital outlay of a motor vehicle.  According to Parker: "The weight of evidence from our investigation establishes that the relationship between Uber Australia and the drivers is not an employment relationship".

It's perhaps an obvious decision by the Ombudsman, following previous decisions by the Fair Work Commission in unfair dismissal cases which also found Uber to not be an employer.  The Commission said “It seems … plainly to be the case that the relevant indicators of an employment relationship are absent ....  The overwhelming weight of the relevant indicia point the other way”.

It is worth noting that this decision by the Ombudsman does not necessarily mean anything about other 'employers' in the gig economy as a whole.  For example, the Ombudsman decided last year to pursue delivery service Foodora for allegedly mis-categorising its delivery workers as contractors, when in the Ombudsman’s view, those workers were actually employees of Foodora.  Those proceedings resulted in Foodora pulling out of Australia all together. 

What remains clear is that 'employment' in the gig economy, like any other industry or era beforehand, is a matter of close examination of each arrangement being assessed on its own merits. 

Author: Ryan Murphy

Contributing Author: Amber Sharp