The Court of Appeal upheld the Employment Court’s decision of Uber drivers being employees of Uber rather than independent contractors providing transport services.

Under our employment legislation the definition of an ‘employee’ is a person, “employed by an employer to do any work for hire or reward under a contract of service”.

In deciding whether a person is an employee, the Court will not look at the person’s job description but rather the intention of the parties and the nature of their relationship.

Employment Court decision

The Employment Court held that Uber drivers are employees because Uber exercises significant control over its drivers.

Uber unilaterally sets its terms and conditions, which cannot be varied or negotiated by drivers. It dictates its fares and service fees which cannot be changed by drivers, and Uber has the sole discretion to cancel a fare or refund a passenger.

Drivers are also prohibited from contacting passengers or retaining their details. Drivers were therefore not intended to be independent contractors with the ability to manage their provided services, but rather employees of the Uber business.

Court of Appeal

Uber appealed the Employment Court decision stating that the Employment Court should have focused on Uber’s terms and conditions, and the rights and obligations which those terms provided for drivers.

Uber’s terms and conditions expressly state there is no employment relationship between Uber and its drivers.

The Court of Appeal examined Uber’s terms and conditions and observed that:

  • Drivers are prohibited from contacting passengers or making use of any information provided to them by Uber other than to provide transport services;
  • Drivers must provide their own equipment including a vehicle, mobile phone, mobile data, and insurance. The vehicle must meet Uber’s requirements and be approved by Uber;
  • Uber has discretion to restrict, or prevent, drivers from using the Uber app;
  • Drivers are required to exercise “due skill, care and diligence” when providing services;
  • Uber has the right to calculate the fare which can be decreased, but not increased, by drivers;
  • Uber has the right to set the service fee and charge a driver any additional fees;
  • Uber handles passenger complaints and makes final decisions regarding complaints;
  • Receipts are issued by Uber on the driver’s behalf;
  • Drivers have to meet their tax obligations themselves;
  • Uber has the right to modify its terms and conditions at any time; and
  • Drivers can work at any place and at any time, and can stop working without notifying Uber.

The Court of Appeal held that while the terms and conditions were drafted to avoid the appearance of an employment relationship, Uber structured its relationship with drivers in a way that gives itself unilateral control over its terms and conditions, its day-to-day operations, and the manner in which drivers provide services through the app.

The Court concluded that drivers are employees of Uber when logged into, and using, the Uber app.

The Court acknowledged the prevalence of ad hoc services being provided through mobile apps in a ‘gig economy’ and noted that there is currently no single legal model to determine employment relationships on these online platforms.

Each platform will have to be scrutinised by its own contractual arrangements and their operation in reality.

Although the Court has said that each situation needs to be looked at separately, it is likely that the Courts will find similar arrangements to amount to an employment agreement rather than a contractor agreement.

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Alan Knowsley and Hanifa Kodirova