The Australian Federal Court will not issue a
first-in-kind ruling on whether Uber’s delivery drivers are employees thanks to a settlement between Uber Australia and a delivery driver who sued the company for unfair dismissal after being blocked from the app for late deliveries. The settlement avoids what could have been an earthshattering ruling in Australia – that Uber drivers are Uber employees - and possibly the first of a chain of dominoes to fall around the world.
Pre-settlement, Federal Court judges skeptical of Uber’s position: During the federal court hearing, judges hammered the argument from Uber’s legal team that there is "no relationship of employment" between Uber and its drivers. One Justice indicated the public perceives an Uber Eats delivery driver as a representative of the company while another Justice tried to pin the lawyer down on the actual consequences of a driver for failing to deliver an order. On the heels of the hearing, Australian Transport Workers’ Union National Secretary characterized Uber as being “on the ropes.”
As noted, Uber settled with the plaintiff before judges could return a verdict. Legal commentators across Australia spoke on the settlement, noting Uber did not feel it was worth the risk of an adverse ruling and settling was left as the only viable option.
If Uber had lost, the ruling would have reshaped the entire gig economy in Australia while paving the way for other independent contractor arrangements to be challenged. Globally, Unions and other advocates for gig-worker rights and benefits would have pointed to an Australian ruling on the issue to buttress the case for the same classifications in their own countries.
Union pushes for better treatment for gig workers and calls for regulations from the government. The debate around the status of gig workers has been raging in Australia for a while. The Transport Worker Union (TWU), which supported the driver-plaintiff in the case against Uber, continues to argue that gig companies should receive the same benefits and social protections as traditional employers, like minimum wage, rostered hours and statutory workers compensation. The union also pointed out that the key to reforming the gig economy will be active regulation from the government, not waiting for the legal cases to be presented to courts.
Outlook: Global Employers operating in Australia should be aware of the development. Contemplating this case, companies need to treat such claims more seriously in future and consider building an internal grievance channel for their gig workers to avoid potential lawsuit. Employers also need to understand a recent ruling permitted gig worker to engage in collective bargaining. HR Policy Global will continue to monitor this situation and provide timely updates.