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Does Uber Australia have an employer/employee relationship with its drivers? The Fair Work Ombudsman says ‘no’

Author: Robert Lamb
2 min read
10 July 2019

Key Takeaways

  • There is no single legal definition of what constitutes an employer/employee relationship when it comes to contractors, in particular in the case of Uber Australia
  • Each case is based on its own facts
  • The Fair Work Ombudsman has ruled that Uber Australia does not have an employment relationship with its drivers. What does this mean for business owners?

On 7 June 2019 the Fair Work Ombudsman completed its investigation into Uber Australia and its engagement of drivers.

After considering all of the evidence including contracts, Uber’s records, banking records and interviews with drivers, the Ombudsman found that the relationship between Uber and its drivers was not an employment relationship.

To read more about the case click here. This is a complex area of the law and unfortunately there is often no clear answer or rule. 

Each case turns on its own facts, and the legal position as to whether or not a person is a contractor or employee may not actually be known until a Court or Tribunal (or the Australian Taxation Office) makes a finding for that particular matter. 

To make matters more difficult, if it is determined that these people are legally designated incorrectly then the employer (if that is what they are) may be liable for: 

  • the employee’s unpaid tax and superannuation; and/or
  • damages if the employee injures themselves.

Whether or not, in any given case, an employer-employee relationship exists is a question of fact to be derived from the circumstances of the case.   

Each case must be considered wholly to determine the relationship between the parties. The determining factor is the ultimate authority to control an employee rather than the actual exercise of control over the employee.  The degree to which the worker is integrated into, and treated as part of the employer’s enterprise may also have some relevance.

Advantages and disadvantages for a person contracting with an independent contractor rather than employing an employee include:

Advantages  Disadvantages
They are not liable for any other payments or benefits other than paying the contractor’s Tax Invoice. They may not have the same control over the contractor as they would over an employee.
They are not liable for leave payments or superannuation. The contractor can work for other people.
They are not liable (at least at first instance) for the negligent actions of a contractor whereas they would be automatically liable for an employee’s negligent actions. They may need to have directors of the contractor company guarantee the performance of the contractor company.

Hillhouse Legal Partners can advise parties as to their legal rights and obligations under existing or new arrangements, advise businesses on how to best engage employees or contractors and can draft agreements to suit each business and its requirements.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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