Fair Work Commission rules Uber Eats drivers are not employees

The ruling sets a precedent whereby an employer-employee relationship does not exist between Uber and its food delivery drivers.
Written by Campbell Kwan, Contributor

Australia's Fair Work Commission (FWC) has ruled that Uber Eats delivery drivers are independent contractors and thus not entitled to employee rights.

The full bench ruling, made on Tuesday, held that an employer-employee relationship did not exist between Uber Eats and one of its delivery drivers due to three "critical" factors.

The first factor was that Uber did not exercise any control over when Amita Gupta -- the delivery driver who raised the lawsuit -- performed her work as she was able to log onto Uber Eat's Partner App whenever she wanted and for as long as she wanted.

The full bench added that there was no obligation for Gupta to accept a particular delivery request.

Secondly, the FWC said Uber Eats drivers are allowed to accept work through other food delivery apps or perform other types of passenger or delivery work.

The third factor was that drivers are not required to wear uniforms, bear company logos, or represent the Uber Eats business beyond what is necessary for collection and delivery.

While the FWC found that an employer-employee relationship does not exist, it did find that there is a contractual relationship between Uber and its food delivery drivers.

In the lawsuit, Uber had submitted that any contractual agreements that did exist were only between restaurants and delivery drivers. According to Uber's submissions, it said it was merely the agent of restaurants in arranging for the attendance of delivery drivers to pick up and deliver meals, and that it only acted as "limited payment collection agent" in collecting delivery fees and remitting them to drivers.

However, the full bench said "labels do not alter the substantive nature of the relationship" Uber has with its drivers. 

"There is no basis to conclude that there was any contractual relationship between Ms Gupta and any restaurant in relation to which she delivered a meal to a customer," the full bench wrote in its judgment.

It also found that Uber has the power to set drivers' pay, ban drivers from having commercial relationships with restaurants, and ban drivers from subcontracting work to others, but noted that this power did not meet the threshold of establishing an employer-employee relationship.

However, despite coming to the conclusion that a contractual relationship existed between Uber and workers, the FWC found that delivery drivers are not in a business relationship with Uber Australia.

According to the ruling, Uber Australia only provides marketing and support services to Uber and Portier Pacific -- the company which issues invoices to deliver drivers and restaurants -- and is not a party to any services agreement or restaurant agreements.

The FWC decision follows a similar decision from the Fair Work Ombudsman (FWO) last year, which also found that Uber Australia's relationship with its drivers was not an employment one.

"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 at the time.

The Transport Workers' Union (TWU), which backed Gupta's lawsuit, said it would consider appealing the ruling as it said the bench was constrained by a High Court authority.

Meanwhile, TWU national secretary Michael Kaine added that the judgment was an important step forward in establishing rights for Uber workers despite the outcome not being in the favour of delivery drivers.

"This 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.

"Uber operates a model of use and abuse when it comes to its workers. It rips them off, refuses to pay them minimum rates, sick leave and sacks them without warning or the chance to appeal."

The TWU previously supported a similar lawsuit against food delivery company Foodora and is currently backing another one against Deliveroo. In the Foodora lawsuit, riders were eventually found to be employees by the FWC. 

Separately, Uber is also facing a class action from over 6,000 taxi drivers in Australia, making it one of the biggest class actions in the country's history. The class action alleges that Uber operated illegally from April 1, 2014, to July 31, 2017, as its drivers did not have the proper licences or accreditation, resulting in monetary losses for taxi drivers.  

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