Employees are afforded benefits that contractors aren’t – leave entitlements, the minimum wage, holiday pay, and recourse for unjustified dismissal, for example.
Uber said it wouldn’t change its New Zealand operations in response to the court ruling, as it planned to challenge it in the Supreme Court.
Court of Appeal justices Goddard, Ellis, and Wylie said: “The critical point is, we think that while a driver is logged into the driver app, that driver has no opportunity to establish any business goodwill of their own”.
They said the drivers couldn’t bargain with Uber to influence the quantity or quality of work they received, nor their revenue, except to the extent Uber agreed to give them more access to ride requests, information about rides, or supplementary payments.
The justices also noted the “high level of control and direction” Uber exercised over drivers while they were logged into the app.
Separately, the Ministry of Business, Innovation and Employment has just started a review of the law to better define employees and contractors.
Uber’s managing director for New Zealand and Australia, Emma Foley, said, “There is an urgent need for certainty in the law pertaining to contractor arrangements.
“We believe such arrangements, where people have genuine flexibility and are also free to work for other companies, including competitors – are an important feature for all industries across New Zealand in the 21st century.”
The Labour Party, First Union, and E tū urged the Government to stop the review, which they believed was aimed at watering down workers’ rights.
The National and Act parties agreed to review the law in their coalition agreement.
Ahead of the 2023 election, Act campaigned on amending the Employment Relations Act “so that contractors who have explicitly signed up for a contracting arrangement can’t challenge their employment status in the Employment Court”.
It suggested that contractors should sign agreements that make it clear they won’t have access to full employee rights.
Act believed agreements should spell out the benefits afforded to contractors – including that they can do work for other businesses (including competitors), which can’t terminate their contract if they don’t accept a certain task.
The party suggested contractors who believed the terms of their contracts were unfair could seek recourse under the Fair Trading Act, which deals with unfair contract terms.
Workplace Relations and Safety Minister Brooke van Velden (who’s also Act’s deputy leader) said the Uber case had contributed to a lot of uncertainty for businesses that use contracting models.
“Contractors play an important role in New Zealand society,” she said.
“There are a range of workers and businesses across the country who are involved in contracting relationships, and who will benefit from increased clarity of worker status, which this Government will deliver.”
Any amendments the Government makes to the law will apply only in the future.
Jenee Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
