Uber Eats drivers are not employees entitled to minimum pay and conditions, the Fair Work Commission has ruled

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Uber delivery drivers are not employees entitled to minimum pay and conditions because of their freedom to choose when they work, according to a precedent ruling.

A senior full bench majority of the Fair Work Commission, led by President Justice Iain Ross, held on Tuesday that Uber Eats drivers were not in an employment relationship because they controlled when they logged on the app and whether to accept delivery requests.

The case, brought by the Transport Workers Union, is the most senior authority on whether gig workers are employees and departs from overseas rulings on the issue.

But the decision is unusual because the full bench majority also found the courier were not in a business relationship with Uber either, even though it found they did work for the gig business.

Terminated driver Amita Gupta brought the case as an unfair dismissal claim, which required the commission to first decide if she was employee.

Despite finding that Uber set their pay, banned delegating work and hindered the driver from expanding a commercial relationship with restaurants, the majority held three factors were decisive in finding against employment.

First, it was “entirely within” the drivers’ control as to when they logged on and for how long and they had no obligation to accept a particular delivery once logged on.

Secondly, even when the driver was logged on they could, and did, accept work from other competitor food delivery apps.

Thirdly, the driver was not required to wear uniform, bear company logos or otherwise represent the Uber Eats business beyond collection and delivery.

“In summary, we do not consider that Ms Gupta’s relationship with [Uber] bore a number of the usual and essential hallmarks of an employment relationship, namely a requirement to perform work at particular times or in particular circumstances, exclusivity when work is being performed, and presentation to the public as serving in the business,” president Ross and vice president Adam Hatcher said.

The majority considered Uber had total control over payment and standards of delivery, which it enforced through a ratings system that threatened suspension or termination.

But it held this was a “neutral” consideration as there was nothing unusual about enforcing quality and performance standards in both independent contractor and employee relationships.

‘Commercially nonsensical’

However, the bench majority also rejected that the driver was conducting her own business.

Uber had tried to argue its drivers’ contracts were with the restaurants themselves and that it merely acted as an agent of the restaurant in arranging pick up and delivery and an agent for the driver in collecting and passing on the delivery fee.

But the majority said Uber’s argument had “no basis” and the actual relationship showed Ms Gupta’s did work for and was paid for it by Uber, regardless of labelling in her agreement.

It noted Uber prevented drivers from knowing the restaurant’s name and address before accepting delivery and neither the driver nor the restaurant had any role in setting the delivery price.

Uber’s purported permission for Ms Gupta to negotiate a lower fee was “entirely nugatory” and “commercially nonsensical”, the bench found, particularly given it also forbid her from communicating with the restaurants other than to fulfil deliveries.

The majority conceded there may be “some tension” between its conclusion Ms Gupta was not an employee and its finding she was not conducting a business in her own right.

However, it suggested Ms Gupta had “the capacity to develop her own independent delivery business as a result of her legal and practical right to seek and accept other types of work while performing work for Uber Eats, but chose not to”.

In a separate judgment, deputy president Alan Colman agreed Ms Gupta was not an employee but also found that she did not perform delivery work for Uber as there was no “work-wages” bargain.

“[Uber] acts as a commercial intermediary between restaurants, customers and deliverers, from which it earns fees,” he said.

“Deliverers use the company’s platform and pay a fee to [Uber] to do so. They thereby gain access to opportunities to undertake deliveries and receive a share of the monies paid by the customer.”

TWU considers appeal

The TWU said it was considering appealing the ruling as it said the bench was constrained by a High Court authority.

Nevertheless TWU national secretary Michael Kaine said the judgment “goes further than we have ever seen in Australia in terms of tearing down Uber’s elaborate business model and exposing it as a sham”.

“It states what is already clear to those who work in Uber and those who use its service: that Uber is a transport service that has responsibilities to its workers, restaurants and the public who use its app,” he said.

A spokeswoman for Uber Eats said the “unanimous ruling” confirms couriers using its platform were independent contractors.

“It also reflects what 87 percent of delivery partners tell us – that they value the freedom and flexibility the Uber app provides,” she said.

“Uber Eats offers delivery partners a flexible way to make money on a schedule that works for them, and where they can be their own boss.”

This story originally appeared in the Australian Financial Review. Read the original story here.

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