In the UK in 2016, the Employment Tribunal found that Uber under certain standards when drivers are performing their duties, they exhibited similar characteristics to employees.
They applied certain tests:
‘High-Quality Service Stats: We continually look at your driver rating, client comments, and feedback provided to us. Maintaining a high rating overall helps keep a top tier service.’
‘Low Cancellation Rate: When you accept a trip request you have committed to the rider, cancelling often or cancelling for unwillingness to drive to your clients leads to a poor experience.’
‘High Acceptance Rate: Going on duty means you are willing and able to accept trip requests. Rejecting too many requests leads to rider confusion about availability. You should be off duty if not able to take requests.’
The Tribunal made a definitive conclusion that these drivers were employees as envisaged by UK law, also taking into consideration penalties imposed by Uber on their drivers, trips controls, and controlling of the technology when they violate the rules.
South Africa and the UK – how do they compare?
South African courts have dealt with a similar case Ube – in this case a review application to the Labour Court.
The CCMA had ruled in an unfair dismissal case which the commissioner stretched and made a finding that in line with the organisation and economic tests suggests that Uber drivers are employees.
The court firstly dealt with the conflation of Uber SA and Uber Bv – this relationship is important to understand the work and the scope of these services.
In essence, the relationship of Uber South Africa with its drivers is that it assists them to get necessary license to operate, approves the vehicle they will be using for the business, whereas Uber BV is international, providing the legal contracts, the technology, and dealing with payments.
This relationship has different legal consequences and should be understood as such. Uber SA serves as a subsidiary.
For Uber London, drivers are tasked with similar duties. When drivers want to join, they get licenses from Uber London, so all drivers enter into an agreement with Uber London which prescribes terms and conditions when prospective drivers register.
The Service Agreement is mandatory as a legal requirement between Uber BV and the independent company.
In SA law, what is the difference between an employee and an independent contractor?
The LRA defines “employee” in terms wide enough to embrace relationships of a less conventional type, and excludes only “independent contractors” from the scope of the Act.
Section 213 of the LRA defines “employee” as follows: “(a) any person, excluding an independent contractor, who works for another or the State and who receives, or is entitled to receive, any remuneration; and (b) any other person who is any manner assists in carrying on or conducting the business of an employer.”
Although the CCMA has pronounced this, the question of whether Uber drivers are independent contractors or employees remains contentious in South Africa.
With the constant transformation of working relationships and the concomitant rise in atypical employment, drawing the line between an employee and an independent contractor is often problematic.
As a result South African courts have so far developed various tests for distinguishing an employment relationship from that between an independent contractor and his or her client.
The tests formulated by courts, among others, includes the control test, organisation test, economic realities test and the dominant impression test.
These tests have at times become somewhat impractical since the distinction between an independent contractor and an employee has become less defined and the presence of atypical employees more prominent.
The most favoured test among others, which courts have turned to and has achieved a popular pre-eminence is one called the “dominant impression” test.
Within the existing realm of this test, the emphasis has now squarely been placed on the employment relationship rather than determining the existence of a valid and binding contract of employment.
The test makes use of several indicators for determining the existence of an employment relationship. Bearing in mind that the determination of the question as to whether Uber drivers fall within the ambit of the definition of an employee or independent contractor in South African labour law is at an early stage, the tests adopted so far to establish whether a person is an “employee” or an “independent contractor” remains contentious.
What about the Uber case?
InUber South Africa Technological Services (Pty) Ltd v NUPSAW and others, the factors came under scrutiny.
The CCMA in this case was called upon to decide whether Uber drivers are employees of Uber for the LRA, as defined in section 213 of the Act.
In their argument before the Commissioner of the CCMA, Uber listed six considerable factors that according to them made it clear that they are not employers of the drivers.
Firstly, they argued that there is no legal obligation on the part of any driver of any Uber registered vehicle or to use the Uber App, as is clear in the Uber BV Services Agreement.
Secondly, they argued that there is also no right to instruct a driver to drive his vehicle, and the driver has a choice of where to drive and which passengers to transport.
Thirdly, it was argued that a partner-driver may employ another driver to drive.
Fourthly, it was argued that drivers are free to work whenever they like on anything else, including competitors.
Fifthly, Uber argued that the partner and not Uber are required to supply a vehicle and to carry all associated expenses.
This constitutes the tool of trade which is not provided by Uber despite the one of App which enables the drivers to operate their vehicles. Lastly, the partner bears all risk of profit and loss as an independent contractor to Uber and a driver is free to move from one partner to another.
Opposing to the above submissions, the drivers contended that they are not independent contractors but employees of Uber.
The drivers submitted that Uber controls them in various ways. Uber controls their conduct and how they perform their work through the system through the digital technology platform Uber controls how the drivers should perform their services, including chargeable fare and how they get hold of Users for transportation services and the location that they should operate their business furthermore to terminate and deactivate the Drivers App is within the only discretion of Uber and not the drivers.
The Commissioner took a limited approach when assessing the arguments and determining whether Uber drivers are employees for the LRA, by particularly relying on the right not to be unfairly dismissed.
The Commissioner embraced a generous interpretation of section 213 of the LRA in making the ruling and noted that part (b) of the definition is wide enough to include Uber drivers.
Furthermore, the Commissioner considered factors enlisted in section 200A of the LRA together with the Code of Good practice and held that even though there is no direct or physical supervision, control over drivers Uber is exercised through the technology platform, the Commissioner held that drivers are economically dependent on the ability to drive for Uber and independently running their own transportation business and that the Driver App provided to drivers are tools of the trade and without it, drivers cannot operate their business and this according to the Commissioner makes Uber drivers form part of Uber’s service.
Uber brought a review application with the Labour Court, and the court decided that Uber does not have jurisdiction to have entertained the matters around Uber’s operations and conflating Uber SA and Uber Bv; however, the court decided not to pronounce if whether or not Uber drivers are employees.
The UK decision was evaluating the fact that Uber drivers work for Uber, not as agents based on their contracts. The court concluded that they work for Uber. South Africa poses a similar conundrum, with the Competition Commission finding that drivers earn below the minimum wage after and work very long hours.