Fair Work Commission dismisses landmark unfair dismissal case against Uber Eats, rules that drivers, riders are contractors
South Australians who ride or drive for Uber Eats are not employees, the Fair Work Commission has ruled. And it means, you’re not able to apply for unfair dismissal if blocked from the app.
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Uber Eats drivers and riders will not be able to claim unfair dismissal after the Fair Work Commission found they could not be classified as employees.
The landmark decision has wide ranging consequences for the “gig economy”, a system of independent workers in short term positions including popular apps Uber, Airtasker and Freelancer.
The decision also distances Uber Eats and similar food delivery apps from lawsuits against riders and drivers, making them less liable for any damages caused by their workers.
The Fair Work Commission in Adelaide ruled on August 23 that the riders and drivers were not employees because they chose whether or not to work.
The Commission was asked to decide whether cancelling a husband and wife duo’s access to the delivery app was unfair dismissal.
Amita Gupta and her husband Santosh delivered food for Uber Eats between September 2017 and January 2019, completing more than 2200 deliveries.
They worked as a team with Mr Gupta driving on most occasions.
On January 15, Ms Gupta was suspended from using the app and then permanently banned following concerns about the registration of the vehicle.
She applied to the Fair Work Commission for compensation for unfair dismissal, arguing that she was an employee of the company and had been dismissed for no reason.
Uber Eats parent company Portier Pacific Pty Ltd and Uber BV, a company registered in the Netherlands, argued that Ms Gupta was an independent contractor and was not eligible for unfair dismissal.
A previous judgment against delivery app Foodora had found that delivery personnel were to be considered employees even though they had not signed an employment contract.
Nick Linke, a partner with law firm Fisher Jeffries, said the decision had industrial lawyers talking.
“The gig economy is a hard thing to get your head around,” he said.
“In each of these cases of app based gig economy providers, the Commission looks at really specific elements of the way the relationship is made up and then makes a decision on a case-by-case basis on who is an employee and who is an independent contractor.
“There was a decision in the Commission last year where a driver for a similar provider called Foodora was held to be an employee for the purposes of unfair dismissal.
“The Uber Eats model works for them because they avoid unfair dismissal and paying award wages, but Foodora fell foul of it.
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“Looking at the two decisions, the big difference is that Uber Eats driver and riders aren’t required to make any deliveries, they can clock in and out at any time.
“But in Foodora there was no requirement to accept the shift, but if you did then you start and finish at certain times and start in a particular location, so there was just enough control for it to count as employment.”
Mr Linke said that while the decision dealt with employment rights, its impact spread to personal lawsuits like negligence.
“Vicarious liability arises in an employment relationship where an employer is held to be liable for wrongs of their employees, but only if they are conducting work for the company,” he said.
“It is not a decision on vicarious liability, but the same factors will apply.
“Someone like Uber Eats or a new gig economy app would look at this model because you could have some confidence that you are not going to end up with an employee relationship.