Australian Fair Work Ombudsman finds Uber drivers are not employees

Uber Australia does not require drivers to perform work at particular times and this was a key factor in its assessment.

The Fair Work Ombudsman (FWO) has determined that Uber Australia's relationship with its drivers is "not an employment relationship" following its investigation into the company's practices.

"For [an employment] 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," Fair Work Ombudsman Sandra Parker said. 

During the investigation, the FWO examined driver contracts, log on and log off records, interviews with drivers and Uber Australia, as well as payment documents.

"Our investigation found that Uber Australia drivers are not subject to any formal or operational obligation to perform work," Parker said. "Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week." 

The FWO's determination is only applicable to Uber Australia and not to other gig economy companies which have different work arrangements, it added.

Australian courts and tribunals, including the Fair Work Commission, have previously found that drivers using the Uber App are not employees of Uber.   

"We welcome the fact that the Ombudsman's findings recognises this," an Uber spokesperson told ZDNet. 

"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."

The employment classification of gig economy workers has been a point of contention in Australia as of late, as people that are often categorised as independent contractors -- like Uber drivers -- are not eligible for employee benefits like superannuation, sick benefits, or stock options. 

"Today's decision by the Fair Work Ombudsman is devastating for workers in the gig economy," the Transport Workers Union (TWU) National Secretary Michael Kaine said in a statement.

"In jurisdictions around the world from London to New York and Los Angeles, Uber is being held to account and faced down despite its massive lobbying efforts and bullying. Yet in Australia today it has been given the green light to continue ripping riders and drivers off, sacking them without warning or the right to appeal and ignoring their pleas to be able to earn a decent living," Kaine added.  

The use of gig economy workers as independent contractors has resulted in companies receiving great scrutiny, with Foodora reaching a settlement last month with the TWU to pay out the AU$3 million figure to delivery riders after the Fair Work Commission determined that some of them were employees. The food delivery service wrapped up its Australian operations in August after accusations that it had abandoned its obligations to provide back pay to workers. 

See: Foodora rider deemed employee in unfair dismissal case      

"We have a situation where we are having an orgy of greed where companies are making millions of dollars at the expense of the Australian community, where food delivery workers, Uber drivers, and many others in gig economies are having money stolen off them, and where they are held to account, the companies are still making substantial millions off of wage theft," TWU spokesperson Sheldon said last month.

Meanwhile, Uber is currently in the midst of a class action lawsuit that covers cover more than 6,000 drivers, operators, and licence owners across Victoria, New South Wales, Queensland, and Western Australia, making it one of the biggest class actions in Australian history.

The claimants are alleging Uber knew that its operations in Australia were illegal as its drivers did not have the proper licences or accreditations. They also allege that the company adopted a program to avoid the use of licences and accreditation, as well as "a policy to operate in any market where the regulator had tacitly approved doing so by failing to take direct enforcement action".

"Make no mistake, this will be a landmark case regarding the alleged illegal operations of Uber in Australia and the devastating impact that has had on the lives of hard-working and law-abiding citizens here," Maurice Blackburn head of class actions Andrew Watson said.

Updated at 1:16pm AEST, 7 June 2019: added comments from TWU.

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