Uber drivers – Employees or independent contractors?

31 Aug 2018

Since Uber’s introduction to the world, there has been a heated debate over whether Uber Drivers (“Drivers”) constitute employees or independent contractors, not only in South Africa, but around the world.

If Drivers were classified employees in South Africa they would automatically be afforded rights in terms of national legislation, such as the Basic Conditions of Employment Act 75 of 1997 and the Labour Relations Act 66 of 1995 (“LRA”).

The question came before the Commission for Conciliation, Mediation and Arbitration (“CCMA”) last year in a battle between National Union of Public Service and Allied Workers (“NUPSAW”) and Others vs Uber South Africa Technology Services Proprietary Limited (“Uber SA”). The matter arose when the Drivers were “deactivated” by Uber Besloten Vennootschap (“Uber B.V.”), the holding company of Uber SA, located in the Netherlands. The applicants in the CCMA were the Drivers along with NUPSAW, who lodged an unfair dismissal.

In the CCMA, Uber SA raised a point in limine arguing that the drivers were not employees of Uber B.V., let alone Uber SA. The Applicants argued that they constituted employees based on the test in section 200A of the LRA.

What does the abovementioned test state?

“200A. Presumption as to who is the employee.

(1) Until the contrary is proved, for the purposes of this Act, any employment law and section 98A of the Insolvency Act, 1936 (Act No. 24 of 1936), a person who works for, or renders services to, any other person is presumed, regardless of the form of the contract, to be an employee, if any one or more of the following factors are present:

(a) the manner in which the person works is subject to the control or direction of another person;

(b) the person’s hours of work are subject to the control or direction of another person;

(c) in the case of a person who works for an organisation, the person forms part of that organisation;

(d) the person has worked for that other person for an average of at least 40 hours per month over the last three months;

(e) the person is economically dependent on the other person for whom he or she works or renders services;

(f) the person is provided with tools of trade or work equipment by the other person; or

(g) the person only works for or renders services to one person.”

(own emphasis)

The Applicants in the CCMA argued that they were employees based on the following factors:

  • they are required to personally perform their tasks;
  • they are predominantly controlled by Uber;
  • Uber regulates their work and performance through software; and
  • Uber controls their pricing and the number of drivers active in a certain area.

In contrast, Uber SA argued that they were not the employers of the Drivers based on the following factors:

  • the Drivers are not under any obligation to drive an Uber registered vehicle, nor use the Uber App;
  • the Drivers can choose where to drive and which passengers to collect;
  • the Drivers provide the tools for the work; and
  • the Drivers cover the costs of trading, as well as bear the risk of profits.

In the CCMA the commissioner ruled in favour of the applicants and found that the drivers were in fact employees, as defined in the LRA.

The matter was taken on review in the Labour Court early this year where the point in limine raised by Uber in the CCMA was explored at length. It was held on review that the CCMA did not take into consideration that Uber SA and Uber B.V., are separate, independent entities. The recruitment and screening of the drivers were all conducted by Uber B.V. and there was no evidence to support Uber SA’s involvement in the recruitment and deactivating of drivers in South Africa. Furthermore, Uber B.V. set the minimum rates and was responsible for all payments of the Drivers. Uber SA was found to have an administrative function and operates purely to provide support to the drivers.

Therefore, the Labour Court found the commissioner’s ruling to be incorrect and reviewable and found in favour of Uber SA, in regard to the jurisdictional point raised in the CCMA. However, the Labour Court noted that the question of whether the drivers are employees or independent contractors has been left unanswered. It was pointed out by the Labour Court that the decision made by the CCMA was overturned on a technicality, which was overlooked by the applicants, who’s dispute should have been lodged against Uber B.V. and not Uber SA.

The commissioner at the CCMA indicated that this matter is not clear-cut, as there are certain factors indicating an employee relationship and certain factors indicating an independent contractor’s relationship. The introduction of Uber is taking South African labour law into unchartered territory and South Africa eagerly await an outcome to the question: are Uber drivers employees or independent contractors?

See also:

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)

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