New Zealand court declares Uber drivers as employees in landmark ruling

Wellington: In a landmark ruling, the Employment Court of New Zealand has declared four Uber drivers as proper employees of the company, paving the way for other countries to follow the suit and force the ride-hailing giant to treat its drivers as employees rather than independent contractors.

The Chief Judge of the Employment Court, Christina Inglis, found that all four drivers were employees of Uber during the periods where they performed transportation services.

The Uber drivers were part of a class-action lawsuit filed last July in the country.

The four drivers had written agreements with the various entities at different points in time between August 2016 and May 2022.

“The written agreements all specified that the entities were not employers but rather providers of the App that connects drivers to the digital platform and facilitators of the interactions on the platform,” read the ruling that came out late on Tuesday.

The decision in New Zealand came after the US Department of Labor proposed sweeping changes to how gig workers should be classified.

The Employment Court highlighted the need to adopt a purposive approach to determining the status of the drivers, having regard to the applicable legislation and its role in protecting vulnerable workers, regulating the labour market, and ensuring the maintenance of minimum standards.

The court found that significant control was exerted on Uber drivers in other ways, including via incentive schemes that reward consistency and quality and withdrawal of rewards for breaches of Uber’s Guidelines or for slips in quality levels, measured by user ratings.

“Drivers were restricted from forming their own relationships with riders or from organising substitute drivers to perform services on their behalf,” the judge observed.

The court found that in reality, Uber exercised significant control over each of the drivers.

It held that the drivers worked for that business; it was not simply a commercial arrangement; and they did not run a business of their own.

The judgment may have a broader potential impact on other Uber drivers globally.