Fair Work Finds Uber Drivers are Independent Contractors Not Entitled to Employee Benefits


The Fair Work Ombudsman has decided Australian Uber drivers remain independent contractors as opposed to employees. The finding comes after a group of drivers alleged the business was conducting sham contracting in order to avoid employee benefits. This decision means drivers are not legally entitled to employee benefits such as sick pay, superannuation, annual leave and the minimum wage. Instead, they are considered self-employed.

The facts:

The Fair Work Ombudsman’s investigation found a key element in their decision against a finding of an employment relationship was each drivers autonomy to complete work at various times. This freedom gives drivers an element of control over their work as they can essentially pick and choose when and for how long they drive each day. The Ombudsman said in order to be classified as an employee, there must be a minimum obligation for the worker to perform work when it is required by the employer.

Investigations into Uber Australia began in 2017 when a group of drivers argued they had been incorrectly misclassified as self-employed. The group, Ride Share Driver United, remain anonymous out of fear Uber will cut off their access to the app. The disgruntled Uber drivers mainly argue the Ombudsman’s decision is incorrect due to their inability to set their own rates. They further claim Uber has control over all elements of the driving process and continuously message drivers explaining how to behave and carry out jobs.

The Ombudsman said their findings were specific to Uber Australia and will not have direct implications on the gig economy more generally.  Each case of non-compliance is unique, and they will continue to assess each issue that comes to them on its own merits.

What does this tell us?

While the elements of this case are specifically unique to Uber Australia, it does reiterate the value placed on employee control/ contractor freedom. It shows us autonomy as to when work is to be completed will likely be allocated by a manager in an employment situation and will hence be up to the discretion of the contractor in the alternative.

If you are uncertain as to what may be classified as an employee or contractor relationship or fear your business may be liable for a sham contracting claim, you can check out our article here.

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