Bryce Edwards: Why the Uber court ruling is a major victory against worker exploitation

Bryce Edwards: Why the Uber court ruling is a major victory against worker exploitation

Do you believe that workers deserve basic employment rights and protections against exploitation? Do you think that workers should be entitled to the minimum wage, have protection from unjust dismissal, have the right to sick leave, holiday pay and KiwiSaver contributions, and the right to unionise and collectively bargain? If so, yesterday’s Employment Court decision in favour of four Uber drivers who were declared to be legal “employees” rather than “contractors” will be news very worthy of celebration.

The decision will have significant ramifications for low-paid workers in the rising “gig economy”. Although there are still some barriers before the ruling sets a full legal precedent, if Uber drivers are to be classed as employees, then the labour movement can now push to afford other vulnerable contractors the rights of employees. Expect to see courier drivers, pizza deliverers, and various health workers given higher standards of employment and incomes as a result.

The ruling highlights the power of tech companies routing employment laws

The Employment Court case pitted the multi-billion-dollar Uber ride-sharing company against some of their workers who were backed by two trade unions. The unions took on the case to help clarify the rights of workers in the new “gig economy” in which businesses seek to offload some of their legal responsibilities by misclassifying their workers as “self-employed businesspeople”.

It’s a massive win for the labour movement and precarious workers. The landmark ruling potentially has huge implications for how the gig economy operates in New Zealand. Tech companies such as Uber have spent huge amounts of effort and lobbying power to be allowed to operate as they want to. Now, however, they might not get their way.

The power of Uber’s political lobbying in New Zealand has not yet been fully explored. But there should now be questions about how the company has been able to establish its current operational model.

Today in the UK, Uber’s former top lobbyist has turned into a whistleblower, releasing documents about how his former company created “disproportionate” and “undemocratic” power in European countries. Mark MacGann, who was involved in the company’s lobbying operations in 22 countries in 2015-16 has claimed that Uber had “unequal unprecedented access to the very highest levels” in the European Commission as well as every European member state. And throughout the world, he claims that ruling politicians have turned a blind eye to Uber’s  “highly unorthodox” employment model.

Releasing 124,00 Uber company files to the Guardian, he says that Uber was successful in getting governments everywhere to deregulate the taxi industry and allow their company to regard their employees as contractors. Although none of this was illegal, he labelled it “borderline immoral”.

Why employment status is a vital “gateway” for workers’ rights

The misclassification of workers as “contractors” by companies like Uber has been a deliberate strategy of companies that are trying to get around the rules which afford basic rights to workers. The gig economy has been created, alongside what Employment Court chief judge Christina Inglis says is “the growing fragmentation, casualisation and globalisation of work and workforces”.

The judge says legal employment status is a vital part of this, because a worker’s legal categorisation as an “employee” is an important “gate” to much more rights and benefits. By passing through this gate, workers can access all sorts of legislative employment entitlements such as annual and sick leave, Kiwisaver contributions, parental and bereavement leave, and the right to bring a personal grievance if sacked without cause. She also said that the employee status was a gateway for government Labour inspectors to be able to take actions on behalf of a workplace or employee.

So, in the case of the four Uber drivers, the judge ruled that the company’s arguments that they were really contractors were “not supported by the evidence”. She commented on Uber’s employment agenda, saying “the applicable employment laws in New Zealand do not allow it to have its cake and eat it too”.

There should be some caution before accepting that the ruling creates a legal precedent for other workers. Technically, it might not yet do this, but the judge was very clear that the ruling might be used by other workers to get the same rights. This is therefore a real game-changer for the huge numbers of the precariat in this country.

What happens now?

Two unions helped the Uber drivers take the legal action – First Union and E tū. They are now calling on other Uber drivers, current and past, to claim their employee status and thereby get backpay and holiday pay. The unionisation of this sector is now occurring – a new Uber driver association has been formed, and First Union is now recruiting members at a discounted dues rate.

Uber has announced that it will appeal the ruling. But there seems to be limited ability to do so. Legal academic Gordon Anderson of Victoria University of Wellington is reported as saying that Uber doesn’t have much room for mounting its appeal. Likewise, employment lawyer Garry Pollak argued yesterday that the declaration of the specialist Employment Court will be hard to overturn: “It alone interprets collective agreements, and it alone interprets or decides whether somebody is an employee or a contractor.”

How will the Labour Government respond?

The Government doesn’t appear to have yet responded to the ruling. Although Employment Minister Michael Wood might have been expected to have celebrated the ruling, he is probably right to take time to consider its huge ramifications. It could also be very tricky for his government to navigate.

The Labour Government have been somewhat on the back foot on the gig economy. Previously when in opposition there was a lot of noise from Labour about improving rights for precarious and vulnerable workers categorised as contractors. But so far this has come to nothing.

The Government has set up a working group to make progress on this under its “Better Protections for Contractors” workstream. However, this work seems to have disappeared while the Government has pursued other priorities.

As part of this programme, Labour had been looking to deal with the problem of vulnerable workers being legally categorised as contractors by creating a new hybrid legal category of “contractor-workers”. These employees wouldn’t have the full rights of workers, but would have better conditions than contractors. It was a compromise solution, which is actually inferior to what the Employment Court ruled yesterday. Hence, it can be said that the Government and Wood are pushing for something less progressive than the courts.

Uber and other employers are likely to lobby the Government to continue with this “solution”, which might avoid them having to afford full employee status to all their workers. And yesterday the following was reported: “Uber says it supports reform and believes the only way workers and platforms can have certainty is if change is made through the parliamentary process rather than by the Employment Court.”

Labour will now be under pressure from the labour movement not to give in to Uber on this. Given the scope of yesterday’s decision, unions will want the Government to make it easier and faster to implement and monitor the new definition of “employee”, rather than creating new categories that large employers might use to undermine this newfound chance for vulnerable workers to get full legal protections.

Much of the New Zealand economy is vulnerable to being “Uber-fied”. Pressure will need to be applied by the political left and unions to counter the lobbying of the large “gig” employers who will be doing their best to fix what they will see as a major defeat in the Employment Court yesterday.


Dr Bryce Edwards is Political Analyst in Residence at Victoria University of Wellington. He is the director of the Democracy Project.

This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.  


Further reading on NZ Uber drivers’ employment

Rebecca Macfie (Newsroom): Gates open for flood of Uber drivers
Melanie Carroll (Stuff): Explainer: What happens now that four NZ Uber drivers have been ruled employees?
Tracy Neal (Herald): Clutch of New Zealand Uber drivers granted workplace protection as employees after landmark court win
RNZ: Uber to appeal against ‘historic ruling’ against rideshare company
Dita De Boni (NBR): Uber to appeal Court’s call on drivers employees, not contractors(paywalled)
RNZ: Court deems Uber drivers to be employees in landmark ruling
Rebecca Macfie (Newsroom): Landmark NZ court ruling: Uber drivers are employees
Herald: Eight New Zealand Uber drivers to be granted workplace protection as employees after landmark court win
1News: NZ Uber drivers win employment rights court case
Tess McClure (Guardian): New Zealand Uber drivers win landmark case declaring them employees
Ben McKay (AAP): NZ court in landmark Uber employee ruling
No Right Turn: A victory for worker’s rights


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