Contractors or permanent employees? Uber debate continues in Court of Appeal

By Kate Green of RNZ

A Court of Appeal case relitigating whether Uber drivers are contractors or permanent employees is underway in Wellington.

In the first of two days of legal debate, Uber's counsel argued drivers more closely resembled contractors than employees, because of the freedom that came with the job.

The 2022 decision had initially fallen in favour of the union - that drivers should be entitled to permanent employee rights like minimum wage, sick leave, holiday pay and collective bargaining.

Earlier on Tuesday, the court and its three presiding judges heard from Uber's lawyer Paul Wicks. He said the role was more similar to contracting, and therefore drivers would be ineligible for those rights.

His reasons included "the high degree of autonomy, decision about hours, free to accept or decline work, the ability to work elsewhere, and also to increase earnings by taking on extra work".

Uber did not take on the normal role of an employer, he said, as it "cannot tell individuals when to drive, or indeed how to do it".

He argued that intention was critical, and when the drivers entered into the agreement with Uber, it was on the understanding that they were contractors.

Wicks argued many of them were highly educated, skilled workers, and therefore knew what they were getting into when they signed a contract agreement.

The previous decision was flawed, he said, as it was based on an assumption of vulnerability on the part of the driver.

Wicks argued that freedom clauses in the contracts showed how flexible the work was, and therefore, how much more similar the job was to contracting than permanent employment.

In response, lawyer for the respondent Peter Cranney, who would continue his argument on Wednesday, said these clauses were so difficult to understand it was like it had been done on purpose, and did not, in practice, equal more freedom.

"These are extremely difficult and complicated documents, which are really the type of thing that one sees on the internet, or wherever, where the idea is to obscure the legal reality of them," he said.

In a statement, Uber New Zealand general manager Emma Foley said 90 percent of its drivers and delivery people would not keep working for Uber if the current flexibility was to stop.

"Flexibility and choice are hallmarks of today's modern workforce, and Kiwis deserve certainty when it comes to the type of work they choose to do.

"Regarding the appeal, we are hopeful the court will reverse the Employment Court's most recent decision that attempts to shoehorn independent contractors into traditional employment and threatens the autonomy we know Uber drivers and delivery people truly value."

Foley said the current ruling "has created significant uncertainty for workers and businesses who rely on contracting arrangements".

"More broadly, we believe Parliament should make clear that contractor arrangements - where people have genuine flexibility and are also free to work for other companies, including competitors - are an important feature of the New Zealand employment landscape in the 21st century."

The hearing continues.