Uber Drivers Contractors for Now, but Deputy President Contemplates Changes to Test

In a recent Fair Work Commission decision, Deputy President Val Gostencnik found that under Australian law, Uber drivers are independent contractors, and therefore ineligible for unfair dismissal protection.  However, DP Gostencnik commented that due to the increasing “gig economy”:

  • the traditional tests to determine whether a person is an employee or a contractor may be outmoded and no longer reflect current economic circumstances; and
  • employment laws may evolve or be developed by the legislature to keep pace with the digital economy

If and until such change occurred, DP Gostencnik held, the traditional Australian tests of employment would continue to be applied.

DP Gostencnik’s comments arose in the context of an unfair dismissal application made by a former Uber driver, whose services were terminated following consistently poor ratings.

A threshold issue for DP Gostencnik was whether the driver was an employee, or a contractor.   

DP Gostencnik held that the relationship between drivers and Uber contained more characteristics of an independent contractor and principal relationship, rather than an employer and employee.  For example, drivers can set their own hours in which they drive, choosing to work for as little or as long as they like; the drivers provide their own cars, insurance and smartphones; and drivers are prohibited from displaying or wearing any Uber branding.  Drivers are also responsible for their own taxation and are not provided with paid leave.

DP Gostencnik found that under the agreed terms between Uber and drivers, Uber owes no legal obligation to a driver other than provision of the free app and the remittance of fees paid by a rider to a driver.  This was inconsistent with an employee relationship. 

The driver’s unfair dismissal application was dismissed. 

For advice or further information please contact:
Jasmine O'Brien
Sladen Legal
T +61 3 9611 0149  l M +61 401 926 108
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: jobrien@sladen.com.au                                                                                                            

Katherine Dennis
Senior Associate  
Sladen Legal
T +61 3 9611 0151 | M +61 407 013 010
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: kdennis@sladen.com.au