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Australia: Employment Watchdog Finds Uber Drivers Are Not Employees

(July 5, 2019) On June 7, 2019, Australia’s Fair Work Ombudsman issued a statement setting out the findings of its investigation into whether Uber Australia Pty Ltd drivers are in an employment relationship with the company under the Fair Work Act 2009 (Cth). The Fair Work Ombudsman is an independent statutory office, established by the Fair Work Act, with the main roles of promoting harmonious, productive, and cooperative workplace relations; ensuring compliance with Australian workplace laws; and monitoring certain work visa arrangements.

The Ombudsman, Sandra Parker, stated that

[t]he weight of evidence from our investigation establishes that the relationship between Uber Australia and the drivers is not an employment relationship.

For such a relationship to exist, the courts have determined that there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer.

Our investigation found that Uber Australia drivers are not subject to any formal or operational obligation to perform work.

Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week.

Uber Australia does not require drivers to perform work at particular times and this was a key factor in our assessment that the commercial arrangement between the company and the drivers does not amount to an employment relationship.

As a consequence, the Fair Work Ombudsman will not take compliance action in relation to this matter.

The findings of the investigation mean that Uber Australia drivers are not entitled to a full range of employee benefits, including sick and annual leave and retirement contributions, and that minimum wage rules do not apply. The investigation had commenced in 2017 following complaints from drivers that they had been misclassified as self-employed.

The Ombudsman clarified that the findings are specific to Uber Australia and do not apply to entities in the gig economy more generally.

Reactions to the Findings

The Ombudsman’s findings were criticized by some Uber drivers and by the Transport Workers’ Union. The Union’s national secretary said “[i]f this is what our laws are guiding regulators to do then these laws are hopelessly broken and the Government must act urgently to put in place rights that protect all workers.”

An employment law expert, Professor Andrew Stewart from the University of Adelaide, said that whether the obligation to work can arise in a practical sense from the way Uber structures its operations “is a matter that could and arguably should have been tested in court, not behind closed doors. As it is, Uber remains vulnerable to claims from drivers and/or unions. But it will rightly feel that the regulator has endorsed its business model.”

Uber Australia welcomed the findings, with a spokeswoman stating as follows:

We believe that being your own boss does not need to come at the expense of security and support in work.

Uber believes that everyone should have access to a set of affordable and reliable social protections, whatever category of employment they are in.

We want to work with governments and the community to ensure Australians can access independent and flexible earning opportunities, without limiting their access to the support and security they deserve.