January 17, 2018

Uber drivers are employees, too

Last year, a few drivers of Uber South Africa Technological Services (Pty) Ltd (Uber SA) were “deactivated” for one reason or another. As a result, they lodged unfair dismissal disputes with the CCMA against Uber SA, who challenged the CCMA’s jurisdiction to arbitrate these disputes, claiming that the drivers were not employees but rather independent contractors.

Because the Labour Relations Act and the Basic Conditions of Employment do not cover independent contractors, they do not enjoy the same protection as employees and therefore are not entitled to lodge an unfair dismissal dispute with the CCMA or the Bargaining Council. Unlike the relationship between an employer and employee, which is regulated by the Labour Relations Act, Basic Conditions of Employment, Employment Equity Act and Skills Development Act, the relationship between a company and an independent contractor is regulated by the Law of Contract and any dispute would therefore have to be argued in a competent Court with jurisdiction.

For those who do not know how Uber works, Uber is an on-demand car service which allows you to request a ride from a private driver through a smartphone compatible application using dispatch software to send the nearest  registered driver to your location. The charge for the ride is debited to your credit card. Uber deducts its fee and pays the balance to the driver. Uber drivers receive a weekly statement of income, detailing the driving hours logged and the income earned;

Uber generally sets some form of performance standard for its drivers, and drivers are required to maintain their ratings. In the event of a driver not maintaining his / her ratings, Uber assists with suggestions on how to improve the ratings, failing which, the driver may be “deactivated”.  Drivers may go for top-up training to improve their ratings and be reactivated.

Throughout the proceedings, Uber SA was confident that the drivers were in fact independent contractors and, as such, deactivation did not amount to dismissal. However, before it can be determined whether someone is an employee or an independent contractor, the person deciding this must consider the real relationship between the parties despite the form of the contract (reality of the relationship test).

Item 52 of the Code of Good Practice, as referred to in the Labour Relations Act, states that “Courts, tribunals and officials must determine whether a person is an employee or independent contractor based on the dominant impression gained from considering all relevant factors that emerge from an examination of the realities of the parties’ relationship.”

The Commissioner made an interesting finding after applying the reality of the relationship test, finding that the Uber drivers are in fact employees of Uber SA and that the CCMA therefore does have jurisdiction to arbitrate the dismissal disputes.

The following factors were considered in the Commissioner’s finding: –

  • the drivers rendered personal services in that they had to be on-boarded personally with the required personal details, licenses and applications;
  • the relationship was indefinite as long as the drivers complied with requirements,
  • drivers are subject to the control of Uber. Drivers choose their own hours of work and could accept or decline a request however, the drivers were subject to the control of Uber through technology, in that Uber set clear standards and performance requirements and also had control in the suspension or deactivation of access to the application, thereby depriving the drivers of the opportunity to work and earn an income. This power to terminate the relationship is the ultimate control and this is what attracts the protections of the Labour Relations Act;
  • the drivers were economically dependent on Uber and are by no means independent or running their own transportation business; and
  • Drivers are essential to Uber’s service. The application provides an extremely convenient and accessible tool for riders to get a lift and for drivers to provide the lift. Customer complaints goes to Uber and not to the driver.

It would seem that Uber drivers can have their cake and eat it… their working hours being fairly flexible with just enough control by the employer to bring the relationship within the ambit of the Labour Relations Act, allowing them to enjoy the same protection as a regular employee working 9 to 5.

Almie Fourie

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