Fair Work Commission finding that Uber is not an employer

Fair Work Commission finding that Uber is not an employer. Employer groups have been dealt a blow after a Fair Work Commission finding that Uber was not an employer and thus unfair dismissal laws did not apply.

With the rise of the gig economy, employment conditions such as minimum wages and conditions, entitlement to annual, sick and long service leave, superannuation, and protection from unfair dismissal and unlawful termination could all be threatened.

As an employee in Australia, you’re entitled to many benefits such as minimum wages and conditions, entitlement to annual, sick and long service leave, superannuation, and protection from unfair dismissal and unlawful termination. With the rise of the gig economy these benefits are no longer guaranteed. In a blow to employee groups, the Fair Work Commission (FWC) decided that Uber was not an employer and thus unfair dismissal laws did not apply.

The FWC applied various tests and determined there were no relevant indicators of an employment relationship:

• control – driver had complete control over the way he wanted to provide his services through the app, including work hours, accepting or refusing trip requests, operation and maintenance of his vehicle;
• equipment – driver was required to supply his own vehicle, valid registration, insurance, smart phone, and wireless data plan;
• uniform – driver was not permitted to display the Uber name, logo or colours on his vehicle and was not required to wear any uniform or other clothing connected to the Uber brand;
• liability to GST and other taxes – driver was required to register for GST and remit all tax liabilities to the ATO, while the income received by the driver was not treated as being subject to PAYG tax;
• description of the relationship – both Uber and the driver had agreed the relationship was solely one of independent contractor;
• other – the driver was responsible for their own tax affairs and did not accrue annual, sick or long service leave, Uber also did not make any superannuation contributions on behalf of the drivers.

These tests used by the FWC are similar to those used by the ATO to determine whether a person is an employee or contractor. Therefore, it is likely that under both employment law and taxation law, an Uber driver will be considered an independent contractor. This decision has ramifications in other areas where the rise of the gig economy is rampant such as food delivery, tasks-on-demand and other freelancing areas.

Provided that the other gig economy companies have structured their business relationships with their contractors in a similar way to Uber, then these companies may not be subject to unfair dismissal and unlawful termination, minimum wages and conditions, requirements to accrue annual, sick leave and long service leave or pay superannuation. This could be a worry for future generations who will be doing more gig economy work and be in less stable employment, as the Deputy President of the FWC has said:

“Perhaps the law of employment will evolve to catch pace with the evolving nature of the digital economy. Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy. But until then, the traditional available tests of employment will continue to be applied”.

Fair Work Commission finding that Uber is not an employer, what do I do now?

In the meantime, until the law changes, protections will not be afforded to people who are classified as contractors. As such if you would like to know whether you’re classified as an employee or contractor, talk to us first.

Hunter Partners are Accountants, Tax Agents and Financial Planners. We can assist you with all aspect of your accounting, tax and financial planning requirements, call Hunter Partners on (07) 4723-1223.