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Court of Appeal to decide on whether Uber drivers are employees or contractors

Submitted by Firm:
Simpson Grierson
Article Type:
Legal Update

The employment status of Uber drivers has been an issue for quite some time, in New Zealand and overseas. The Employment Court was first tasked with resolving this issue in 2020, and at that stage found that an Uber driver was not an employee.

However, in 2022, the Employment Court reached a different conclusion and found four Uber drivers were employees rather than contractors. 

The Court of Appeal, in granting leave to appeal, acknowledged the importance of ensuring the correct approach to the contractor vs employee test given the “new ways and fast-moving changes to the way in which work is done”. The Court also noted that “in the context of Uber businesses with multiple individual drivers who may be impacted by the decision, it is of general or public importance. It may have an impact on other businesses.” 

The Court will consider the longstanding test of assessing the “real nature of the relationship”, in the contest of the gig economy, between Uber and its drivers under section 6 of the Employment Relations Act 2000 to determine whether Uber drivers are in fact employees. Section 6 was described by the Employment Court as “the gate through which a worker must pass” before they can access the “constellation” of rights and protections provided to employees under the Act, and other minimum employment standard legislation, such as minimum wage, rest and meal breaks, KiwiSaver contributions, and holidays and leave. 

The section 6 contractor vs employee test is recognised as being intensely factual and involves consideration of a multitude of factors such as the contractual terms, the intention of the parties, and analysis of how the relationship operates in practice to determine levels of control, independence and integration. 

The application has been granted in the context of the government’s recent policy ‘bonfire’ announcement to defer work on proposed reforms relating to independent contractors. The government’s justification for the deferral was linked to Uber’s application for leave and the significant implication this case will have on the legal definition of a contractor. Despite the Government’s poor attempt to leave the status of contractors as a matter for the courts to determine, Parliament will need to address this significant issue in the near future as, regardless of the Court of Appeal’s decision, there will be plenty of scope for parties in future cases to argue that their factual circumstances are distinguishable. 

This will be the first time an appellate Court has considered the test for whether a worker is an employee or contractor since the Supreme Court found a Lord of the Rings model-maker was an employee in its Bryson v Three Foot Six Ltd decision, almost 20 years ago.

Special thanks to Meg Vogel, Law Graduate, for her assistance with this article.