In the case of Arachchige v Rasier New Zealand Ltd & Uber BV (NZEmpC 230, 17 December 2020), the Employment Court examined the complaint for unjustifiable dismissal presented by a self-employed worker providing his services to the platform company Uber under its branches Rasier New Zealand Ltd and Uber BV.
After four years with this platform, subject to a service agreement signed with the company, the complainant’s account was disactivated when Uber received a complaint from a passenger. “Although UBER said it investigated the complaint, Mr Arachchige says he did not have any knowledge of the details of the complaint, nor was he given any opportunity to provide a response. This deactivation ended Mr Arachchige’s association with UBER and is the basis of his claimed personal grievance for unjustifiable dismissal” (paragraph 12).
The Court, in line with Section 6 of the New Zealand Employment Relations Act, had to determine “‘the real nature of the relationship’ between the parties, having regard to all relevant matters including the intention of the parties”.
Section 6 defines an employee as:
(1) In this Act, unless the context otherwise requires, employee—
(a) means any person of any age employed by an employer to do any work for hire or reward under a contract of service; [...]
(2) In deciding for the purposes of subsection (1)(a) whether a person is employed by another person under a contract of service, the court or the Authority (as the case may be) must determine the real nature of the relationship between them.
(3) For the purposes of subsection (2), the court or the Authority—
(a) must consider all relevant matters, including any matters that indicate the intention of the persons; and
(b) is not to treat as a determining matter any statement by the persons that describes the nature of their relationship. [...]
The New Zealand Supreme Court already clarified in a previous decision that “all relevant matters” includes the terms of the contract, the intention of the parties, the relationship operated in practice, and the industry practice.
The Employment Court examined all these features and concluded that:
- “Mr Arachchige’s Services Agreement was not, in form, an employment agreement. [...] In the written agreement, the parties expressly agree that it is not an employment agreement and that it does not create an employment relationship. While the Services Agreement is personal to the driver signatory, it did not require exclusivity; drivers are not to display any Uber logo or other signage and Uber drivers are able to undertake other activities, including in competition with UBER. There are some matters in the Services Agreement that one might see in an employment agreement, including qualification requirements and performance expectations. However, those are matters that may be present in other agreements, for example franchise agreements, where the performance of the contract may reflect on the reputation of the principal. Overall, the Services Agreement is not in the form of, and does not operate as an employment agreement. [...]”.
- “The relationship operated in practice in line with the Services Agreement. [...] He determined whether and for how long he undertook services. He provided all the necessary equipment and tools to undertake the work, including the vehicle, smart phone, a data plan and insurance. He also was also responsible for his tax obligations. [...] it was for Mr Arachchige to determine what vehicle to use, when he would carry out the services, and where he would do so. None of that is consistent with an employment agreement”.
- “The principal argument for Mr Arachchige to be an employee was the lack of control that he had over building a customer base and over determining what fare to charge. The two are inter-related. As noted, there was, in theory, an ability for a driver to charge a passenger less than the quoted price, but without the ability to establish a relationship with passengers, and thereby attract future work, this was of no value to Mr Arachchige. [...] Nevertheless, there were other ways Mr Arachchige could improve the profitability of his business – where and when he carried out driving work, so he could choose to make the most of peaks in demand; and what car, phone, data plan, insurance and other business support he might use. Mr Arachchige also could share the vehicle with another person to reduce outgoings”.
In the light of the above, the Court stated that “the agreement between UBER and Mr Arachchige reflected the parties’ intention, and the parties acted in accordance with the agreement. Mr Arachchige was not employed by Rasier NZ and/or Uber BV”.
Given the lack of an employment relationship, the complainant was not entitled to proceed with his personal grievance for an unjustifiable dismissal.