What is the legal employment status of your Uber driver?

Employment status of you Uber Driver

Uber is one of the fastest growing brands in the world and it is difficult to remember a time when you could not simply log onto the App on your phone and request a friendly Uber driver to collect you from your current location and take you to where you need to be, at virtually any time of the day.

However, how many of us stop and think about the legal status is of those Uber drivers and what labour laws protect them? Around the world, there is a debate about whether they are employees of Uber or independent contractors.
Workers who are classified as employees are automatically afforded rights in terms of national legislation, such as the Labour Relations Act 66 of 1995 (“LRA”) and the Basic Conditions of Employment Act 75 of 1997 (“BCEA”).

The Commission for Conciliation, Mediation and Arbitration (“CCMA”) was tasked with deciding this difficult question in the matter of National Union of Public Service and Allied Workers (“NUPSAW”) and Others vs Uber South Africa Technology Services Proprietary Limited(“Uber SA”).

The dispute came about when Uber Besloten Vennootschap (“Uber B.V.”), the holding company of Uber SA, located in the Netherlands, “deactivated” Uber drivers. Uber B.V. provide the legal contracts, technology and deal with the collection and payment of monies received from the Uber drivers. However, Uber SA, being Uber B.V.’s local subsidiary, hires, controls and approves the Uber drivers. The Uber drivers predominantly, if not exclusively, engage with Uber SA on a daily basis and not Uber B.V.

In the CCMA the applicants were the Uber drivers who referred their disputes as unfair dismissals after they were “deactivated” for some or other reason. They were supported by the trade union NUPSAW. Uber SA objected to the CCMA’s jurisdiction on the basis that the Uber drivers weren’t employees of Uber SA but rather independent contractors.

The applicants contended that they were employees based on the test which is set out in section 200A of the Labour Relations Act.
The applicants in the CCMA argued that they were employees based on the following factors:
• they are required to perform their duties personally;
• customers did not contract with the applicants as drivers, but instead with Uber; and
• they are largely controlled by Uber. For example, Uber regulates their work and performance through software, Uber controls their pricing and also the number of drivers active in a certain area.

Uber SA argued that the applicants were not employees based on the following factors:
• the applicants were not under any obligation to drive an Uber registered vehicle, nor use the Uber App;
• the applicants could choose where to drive and which passengers to collect;
• Uber did not provide vehicles to drivers, which are essential tools for the trade; and
• the applicants bore the risk of profit or loss.

The CCMA found in favour of the applicants and held that the Uber drivers were in fact employees, as defined in the LRA. Uber disagreed with the decision of the CCMA and took the matter on review to the Labour Court where the question of whether Uber drivers are employees or not was again considered.

The Labour Court took a different stance to the CCMA. It was held that the CCMA failed to consider the fact that Uber SA and Uber B.V. are separate, independent entities. Uber B.V. exclusively handled the recruitment and screening of the Uber drivers. There was no evidence to suggest that Uber SA had any involvement in deactivating the Uber drivers in South Africa. Uber SA was found to have a purely administrative function, providing support to the Uber drivers.

The Labour Court accordingly held that the CCMA’s ruling was incorrect and found in favour of Uber SA. However, the Labour Court made a special mention of the fact that the question of whether the applicants are employees or independent contractors has been left unanswered. It was noted by the Labour Court that the decision made by the CCMA was overturned on a technicality, on the ground that the applicants should have joined Uber B.V. in the CCMA when they first referred heir disputes.

An important lesson to be learnt from this matter is the importance of instructing an experienced firm of attorneys with expertise in not only labour law, but general litigation as well. This type of expertise would have greatly benefited the Uber drivers, as an experienced litigation attorney would understand the importance of joining the relevant parties to the dispute.

Labour law in South Africa, and all over the world for that matter, is being taken into new waters by the introduction of Uber and its system of contracting drivers. There is no doubt that this question will come before a South African court soon enough and we eagerly anticipate the outcome to the question of whether Uber drivers are employees or independent contractors.

If you would like advice on the employment status of your employees or a way to correct any problem areas in your employment contracts, contact Pagdens and let us map your journey as an employer.

This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)