Are Uber Drivers Employees? An Overview of Court Rulings Across the Globe

Co-Author: Elena Stanciu

The wage-labour model is undergoing profound changes as a result of the digital revolution. The question whether Uber drivers are employees or independent contractors remain a major concern. This research note presents an overview on different rulings made by courts across the globe.

Qualification as employees

FRANCE: The Cour de cassation ruled that Uber drivers are employees, as the service is created and entirely organised by Uber, the drivers do not have a clientele of their own and are not free to set the rates or any conditions of the service, and that all parameters managed by Uber. As the drivers enter a centralised service entirely organised by Uber when connecting to the platform, no conclusive element precludes a 'subordination link'.

Uber controls fares and price adjustments and gives instructions to the driver. The restriction/deletion power of Uber on the drivers' accounts along with the ability to adjust fares characterises a disciplinary power. This bundle of clues has motivated the Court to qualify the drivers as employees. However, some local Labour Courts did not follow this position. A ruling of the Cour de Cassation will have to specify the general scope of this decision.

SWITZERLAND: A Swiss Court concluded that a former driver was in an employment relationship with Uber, thus confirming a judgement of another Court which had awarded compensation for unjustified dismissal to a former Uber driver. Both note that the relationship between the driver and Uber must be qualified as an employment contract.

A motivation Statement made by the Cantonal Court will specify the scope of the judgment, as the question still remains whether this ruling builds a precedent case on federal level or if it is only applicable to this case. The motivation statement will certainly answer that question.

UNITED KINGDOM: In a 2016 Landmark Ruling the Employment Tribunal held that Uber drivers are employees and therefore are entitled to employee rights. The court found that Uber runs a transportation business and therefore employs its drivers.

The main reasons for this decision were amongst others the following: Uber has sole discretion to accept and decline bookings, drivers are required to accept rides and to not cancel them (enforcement by logging them off in case of breaches), Uber interviews and recruits its drivers, sets the route of the drivers, fixes their fare and drivers do not have the possibility to negotiate a higher fare. Uber decides about rebates without consulting the drivers (even though their remunerations are affected by that), handles passenger complaints and imposes conditions such as accepted cars and how drivers have to work.

An appeal by Uber to the Employment Appeal Tribunal was dismissed. Subsequently, Uber appealed to the Court of Appeals, which upheld the decision. Uber is currently appealing to the Supreme Court.

STATE OF CALIFORNIA, USA: A court in California ruled that Uber drivers are employees. The State of California requested a preliminary injunction against Uber based on the claim that they were violating state law by classifying their drivers as independent contractors. The state based its claim on the Assembly Bill 5, which establishes that companies can only treat their workers as contractors if these workers are not subject to any control of the company and are performing work outside the company's core business. In August 2020, the court ruled that Uber therefore has to reclassify their workers in California as employees. Uber appealed, but the Appeals Court upheld the ruling.

Qualification as independent contractors

AUSTRALIA: The Australian Fair Work Commission (FWC) precluded an employee-employer relationship. The FWC ruled that an employee is the servant of the other, and the independent contractor carries on a trade or business on his/her own behalf. Following this logic, the FWC concluded that Uber drivers were independent contractors under this definition. To qualify them as employees, there should have been at least an obligation to perform work when the employer demands it.

The Fair Work Ombudsman upheld this position, as the drivers remain in control over whether, when and for how long they work and Uber does not interfere in these decisions. Hence, the Ombudsman will not take compliance action in this issue.

BRAZIL: The highest Brazilian Court ruled against the qualification of Uber drivers as employees. The drivers keep flexibility when it comes to the fares they accept and the number of clients they serve. The judge added that Uber remains partner and not employer, as the drivers are paid between 75 and 80 percent of the total tariff. The Court decision qualifies the drivers as independent contractors.

Other relevant decisions

EUROPEAN UNION: In 2017 the ECJ decided on a preliminary question regarding the interpretation of several EU Law provisions, which aimed to clarify whether Uber is a transport service and therefore is excluded from the scope of Article 56 TFEU, Directive 2006/123 and Directive 2000/31.

Even though the court recognizes Uber's role as intermediary, it states that this is only one part of Uber's service. The court notes that without Uber's application, drivers would not provide transport services and the users would not use the driver's services. Furthermore, Uber exercises a decisive influence on the conditions of the service the drivers provide, e.g. in setting the maximum price for the ride. Consequently, according to the court Uber's service consists mainly of a transport service within the meaning of Article 58 (1) TFEU.

The ECJ decision is likely to have important implications for the question whether drivers can be considered employees. Uber argues that their service is merely the intermediation between drivers and riders and that therefore their drivers are independent contractors. With this decision the ECJ disagrees with Uber's argument.

CANADA: An Uber Eats driver filed a class action seeking recognition as an employee that also has the rights and remedies under the Ontario Employment Standards Act.

The Supreme Court ruled that the assessment of an employee-employer relationship is an employment-related matter. Therefore, an international arbitration procedure is to be precluded - a general clause with Uber provided for an obligation to resolve disputes in front of an arbitrator in the Netherlands. This decision paves the way for a class action in Canada in front of the competent court in Employment disputes. The assessment of the relationship between Uber and its drivers is therefore soon to be discussed by the Court.

Conclusion

There is a trend towards the classification of Uber drivers as employees. A major argument for the qualification as an employee was that Uber has a decisive influence on the conditions of the service. On the other hand, courts argue with the greater flexibility of Uber drivers compared to traditional employees to preclude an employment relationship.

Case law:

(FR) Cour de Cassation, Chambre Sociale. Ruling no. 374 of 4 March 2020 (19-13.316)

(CH) Cour d'appel civile du Canton de Vaud. Ruling no. P317.026539-190917/380 of 23 April 2020

(UK) Supreme Court, Uber BV and others v Aslam and others

(UK) Court of Appeals, Uber and others v Aslam and others, A2/2017/3467

(UK) Employment Appeals Tribunal, Uber and others v Aslam and others

(UK) Employment Tribunal, Aslam and others v Uber and others, marg. 86, 89, 92 93

(AUS) FWC, Mr Michail Kaseris v Rasier Pacific V.O.F (U2017/9452) of 21 December 2017 ; Janaka Namal Pallage v Rasier Pacific Pty Ltd (U2017/13448) of 11 May 2018

(BRA) Tribunal Superior do Trabalho, "Marcio Vieira Jacob x Uber do Brasil Tecnologia Ltda. e outros". Ruling No. TST-RR-1000123-89.2017.5.02.0038 of 07 February 2020, 2, 6 16, 21, 22

(EU) ECJ, case C‑434/15, marg. 33, 34, 35, 37, 39, 40, 48

(CAN) Supreme Court, Uber Technologies Inc. v. Heller, 2020 CSC 16

Legal sources:

(UK) s.230(3)(b) of the Employment Rights Act 1996

(US) Sec. 2 Assembly Bill 5

(AUS) Fair Work Ombudsman, Investigation Report No. 8993 of 7 June 2019.

(EU) Article 58(1) TFEU

(EU) Article 267 TFEU