DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Michail Kaseris
v
Rasier Pacific V.O.F
(U2017/9452)

Application for an unfair dismissal remedy; whether applicant an employee; application dismissed.

[1] Mr Michail Kaseris has applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. On 29 August 2016, he entered into a services agreement, including service fee addenda (explained further below), with Rasier Pacific V.O.F (the Respondent). The Respondent provides a software platform which essentially allows motor vehicle drivers to connect with members of the public requiring transportation services. The software platform is commonly known as “Uber”. The Applicant alleges that he was dismissed by the Respondent on 11 August 2017. 1

[2] The Respondent says that the Applicant’s application should be dismissed on the ground that the Applicant was engaged as an independent contractor, he was not an employee and was therefore not a person protected from unfair dismissal. 2 The Respondent says that all of the indicia of the relationship clearly illustrate that the Applicant was an independent contractor and that the Applicant’s application for an unfair dismissal remedy should therefore be dismissed.

[3] I have concluded that the Applicant is not an employee within the meaning of s.386(1)(a) of the Act and accordingly, is not able to pursue this application. The reasons for this conclusion are discussed in the latter part of my decision.

The operation of Uber

The “Uber” Brand

[4] The Respondent is an unlimited partnership that is registered in The Netherlands. 3 There are two partners operating under the Uber brand namely Uber Pacific Holdings B.V. (a private company registered in the Netherlands) and Uber Pacific Holdings Pty Ltd (a company registered in Australia).4 Uber Pacific Holdings B.V. is solely responsible for the day-to-day affairs of the Respondent.5

[5] Uber commenced its operations in approximately 2010 and is now one of the most widely used means of private transportation across the globe. Uber is the trademark name for the software application which is more popularly known as the “Uber App”. 6 The Respondent describes Uber as a technology based business premised on supplying lead-generation software and is in no way affiliated with providing transport services in Australia.7 Respectfully, the distinction drawn by the Respondent is one that is in reality, without a difference. Whilst it may be correct that the Respondent does not directly provide transport services in Australia, it and the technology upon which its business is based facilitate the provision of transport services. Moreover, it generates its revenue directly as a consequence of the transport services provided by drivers to members of the public who are brought together by the Uber App. To quote from a recent United States District Court decision concerning a similar issue to this application:

“First, Uber’s self-definition as a mere “technology company” focuses exclusively on the mechanics of its platform (i.e., the use of internet enabled smartphones and software applications) rather than on the substance of what Uber actually does (i.e., enable customers to book and receive rides). This is an unduly narrow frame. Uber engineered a software method to connect drivers with passengers, but this is merely one instrumentality used in the context of its larger business. Uber does not simply sell software; it sells rides.” 8 [Footnotes omitted]

[6] Uber operates across two smartphone applications. 9 One application is for people who require transportation services known as the “Rider App” and the other application is for drivers who supply the transportation services known as the “Partner App”.10 Both of these applications can be downloaded onto a smart phone by an individual at any time, free of charge.11

Riders

[7] The Rider App is the dedicated application for people who want to request what is commonly known as a “trip”. In order to use the Rider App an individual must create an account and register their contact and payment details within the application. 12 Once registered, an individual must accept the terms and conditions of use and if and once they are accepted, the individual is then able to use the application to request a trip.13 In order to request a trip, the Rider must open the application on their smart phone, provide their pick up and drop off location and then select the category of vehicle they want to ride in (discussed below at [8].14 Once these details have been provided, the Rider is given an estimate of the fare for the trip as well as an estimated time of arrival of the Driver.15 If the Rider is happy with the estimated fare and the Driver, the Rider confirms the request for the trip.16

[8] In Victoria, a Rider has a range of options about the type of vehicle in which the Rider wishes to travel. 17 Presently, the following options are available:

•  uberX – any motor vehicle that meets the minimum requirements of the Respondent);

•  uberSLECT – a mid-tier luxury sedan;

•  uberXL – a SUV or sedan hat seats six or seven people;

•  uberBLACK – a high-end luxury vehicle; or

•  uberASSIST – a motor vehicle that can accommodate folding wheelchairs, walkers and collapsible scooters. 18

Drivers

[9] The Partner App is the dedicated application for people who want to provide transportation services to Riders. In order to use the Partner App, the first step that a prospective Driver needs to complete is to set up an account in the application. 19 Once an account has been set up, the prospective Driver must go through an activation process, which involves submitting a number of formal documents, including a valid driver’s licence, driving history check and motor vehicle insurance to the relevant authority (in Victoria, the relevant authority is the Taxi Services Commission).20 The prospective Driver must also select which kind of Uber service, referred to at [8], they want to provide.21 Once all of the mandated documents have been submitted to the relevant authority, they are electronically uploaded into the systems owned by Uber and are reviewed for compliance with Uber’s minimum standards.22 The review process broadly involves verifying and reviewing the documents lodged by the prospective Driver, conducting a driving history and criminal check, reviewing the results of those checks and confirming that the motor vehicle identified by the prospective Driver meets the minimum requirements for the service delivery option nominated and that the registration for the vehicle is valid.23

[10] If the application is approved, the final step that a prospective Driver must complete before he or she can accept trip requests via the application is to accept the terms and conditions contained in a services agreement. 24 For prospective Drivers who wish to provide trips in the uberX option, as was the case with the Applicant, this is a services agreement with the Respondent (Services Agreement).25 Once a driver account is activated, an individual must accept the terms and conditions in the Services Agreement which is contained in the Partner App.26 If the individual accepts the terms and conditions, they are then able to accept trip requests via the Partner App.27

The Services Agreement and the Service Fee Addendum

[11] The Services Agreement is an agreement between a Driver and the Respondent. The Services Agreement sets out the terms and conditions governing the relationship between a Driver and the Respondent, including, inter alia, ratings, vehicle requirements, fares, proprietary rights and insurance. 28 When the Respondent changes a term of the Services Agreement or inserts a new term, a Driver is prompted, via the Partner App, and is required to accept the revised terms and conditions of the Services Agreement before the Driver is able to accept any further trip requests.29 In the period during which the Applicant was active in the Partner App, the Services Agreement changed once.30

[12] The Services Agreement includes a Service Fee Addendum which is specific to the particular State in which a Driver is providing transport services. 31 The Service Fee Addendum specifies the service fee that is payable by a Driver to the Respondent.32 Any changes that are made to the Service Fee Addendum are communicated to a Driver and must be accepted by him or her in the same manner described in [11].33 In the period during which the Applicant was active in the Partner App, the Service Fee Addendum changed once.34

Rider Requests

[13] When a Rider makes a request through the application for a trip, the request is sent to a Driver who is actively logged onto the Partner App and is either not on a trip or is nearing the end of a trip with another Rider. 35 The trip request is communicated to a Driver as a pop-up notification in the Partner App and the notification includes the name of the Rider, the Rider’s rating and the pickup location.36 The Driver who receives the notification can either accept or ignore a request.37 If a Driver accepts the request they may do one of four things:

a. Complete the trip;
b. Cancel the accepted trip request before they arrive at the pickup location;
c. Cancel the accepted trip request after they arrive at the pickup location but before the Rider is picked up by the Driver (in which case, this may mean that a Driver is charged a cancellation fee); or
d. Cancel the trip after they have picked up the Rider but before they have completed the trip. 38

[14] A Rider is also able to cancel a trip request either before or after a request has been accepted by the Driver and in certain circumstances, this may also mean that the Rider is charged a cancellation fee. 39

Trips

[15] Once a Driver has accepted a trip request from a Rider, the Driver proceeds to the Rider’s pickup location and once the Rider has been picked up, the trip commences and the Driver selects “Start Trip” in the Partner App. 40 The Driver takes the Rider to the destination and once the Driver has arrived at the destination, the Driver selects “End Trip” in the Partner App.41

[16] At the cessation of the trip, the payable fare is communicated to the Rider via the Rider App and is charged to the credit card that is registered in the Rider’s account. 42 A receipt reflecting the amount charged is also sent by email to the Rider.43

[17] At the end of each trip, both the Driver and the Rider are invited, via the respective applications, to “rate” the other party. 44 The rating is provided as a number out of a possible five.45 Riders are also able to provide comments if they wish.46

Relationship between Drivers and Riders

[18] Clause 2.3 of the Services Agreement describes the legal relationship between Drivers and Riders as follows:

“2.3 Your Relationship with Users. You acknowledge and agree that your provision of Transportation Services to Users creates a legal and direct business relationship between you and the User, to which Rasier Pacific and its Affiliates are not a party. Rasier Pacific and its Affiliates are not responsible or liable for the actions or inactions of a User in relation to you, your activities or your Vehicle. You shall have the sole responsibility for any obligations or liabilities to Users or third parties that arise from your provision of Transportation Services. You acknowledge and agree that you are solely responsible for taking such precautions as may be reasonable and proper (including maintaining adequate insurance that meets the requirements of all applicable laws) regarding any acts or omissions of a User or third party. You acknowledge and agree that Rasier Pacific and its Affiliates may release your contact and/or insurance information to a User upon such User’s reasonable request. You acknowledge and agree that, unless consented to by a User, you may not transport or allow inside your Vehicle individuals other than a User and any individuals authorized by such User, during the performance of Transportation Services for such User. You acknowledge and agree that all Users should be transported directly to their specified destination, as directed by the applicable User, without unauthorized interruption or unauthorized stops.” 47

Relationship between Drivers and the Respondent

[19] Clauses 2.4 and 13 of the Services Agreement describes the relationship between Drivers and Riders as follows:

“2.4 Your Relationship with Rasier Pacific. You acknowledge and agree that Rasier Pacific’s provision to you of the Driver App and the Uber Services creates a legal and direct business relationship between Rasier Pacific and you. Rasier Pacific does not, and shall not be deemed to, direct or control you generally or in your performance under this Agreement specifically, including in connection with your provision of Transportation Services, your acts or omissions, or your operation and maintenance of your Vehicle. Except as expressly set out herein, you retain the sole right to determine when and for how long you will utilize the Driver App or the Uber Services. You retain the option, via the Driver App, to attempt to accept or to decline or ignore a User’s request for Transportation Services via the Uber Services, or to cancel an accepted request for Transportation Services via the Driver App, subject to Rasier Pacific’s then-current policies (including the Driver Deactivation Policy located at www.uber.com/legal). You will not: (a) display Rasier Pacific’s or any of its Affiliates’ names, logos or colors on any Vehicle(s); or (b) wear a uniform or any other clothing displaying Rasier Pacific’s or any of its Affiliates’ names, logos or colors. The foregoing does not apply if you and Rasier Pacific have agreed otherwise or if so required by law. You acknowledge and agree that you have complete discretion to provide services or otherwise engage in any business or employment activities. For the sake of clarity, you understand that you retain the complete right to: (i) use other software application services in addition to the Uber Services; and (ii) engage in any occupation or business. Rasier Pacific retains the right to, at any time at Rasier Pacific's sole discretion, deactivate or otherwise restrict you from accessing or using the Driver ID, Driver App and/or the Uber Services in the event of a violation of this Agreement, any relevant policy, including the Driver Deactivation Policy or the Driver Privacy Statement (Non-U.S.) (located at www.uber.com/legal), you disparagement of Rasier Pacific or any of its Affiliates, your act or omission that causes harm to Rasier Pacific’s or its Affiliates’ brand, reputation or business as determined by Rasier Pacific in its sole discretion. Rasier Pacific also retains the right to deactivate or otherwise restrict you from accessing or using the Driver ID, Driver App and/or the Uber Services for any other reason at the sole and reasonable discretion of Rasier Pacific.

13.1 Except as otherwise expressly provided herein with respect to Rasier Pacific acting as the limited payment collection agent solely for the purpose of collecting payment from Users on your behalf, the relationship between the parties under this Agreement is solely that of independent contractors. The parties expressly agree that: (a) this Agreement is not an employment agreement, nor does it create an employment relationship (including from a labour law, tax law or social security law perspective), between Rasier Pacific (and/or its Affiliates) and you; and (b) no joint venture, partnership, or agency relationship exists between Rasier Pacific (and/or Rasier Pacific’s Affiliates) and you.

13.2 You have no authority to bind Rasier Pacific and/or its Affiliates and you undertake not to hold yourself out as an employee, agent or authorized representative of Rasier Pacific and/or its Affiliates. Where, by implication of mandatory law or otherwise, you may be deemed an employee, agent or representative of Rasier Pacific or an Affiliate of Rasier Pacific, you undertake and agree to indemnify, defend (at Rasier Pacific’s option) and hold Rasier Pacific and its Affiliates harmless from and against any claims by any person, entity, regulators or governmental authorities based on such implied employment, agency or representative relationship. The indemnity set out in this clause 13.2, insofar as it relates to a finding by a judicial body or legislative authority of competent jurisdiction that there is an employment relationship between you and Rasier Pacific or an Affiliate of Rasier Pacific, applies only to that proportion of Rasier Pacific’s liability that directly or indirectly relates to you holding yourself out to be an employee of Rasier Pacific or any of its Affiliates, or any other act or omission by you that is not expressly authorised by Rasier Pacific and would reasonably suggest to a third party that you are an employee of Rasier Pacific or any of its Affiliates. You expressly agree that where required or implied by applicable law or otherwise, you may be deemed an employee, agent or representative of Rasier Pacific or an Affiliate of Rasier Pacific, any payments made to you will be taken to be inclusive of (i) superannuation contribution amounts; and (ii) amounts equivalent to all taxes (including but not limited to income taxes) payable by you in respect of those payments, in each case that Rasier Pacific (or any of its Affiliates) may otherwise be required to pay under applicable law.

13.3 You expressly acknowledge and agree that by agreeing to the terms and conditions of this

Agreement you intend to perform Transportation Services and, as such, Rasier Pacific may, based on information provided by you and/or third parties, consider you to be registered for GST in accordance with applicable GST law.” 48

[20] The Respondent grants a Driver a sub-licence to use the Partner App in accordance with the Services Agreement. 49

Driver use of the Partner App

[21] Use of the Partner App by a driver is flexible and allows a Driver freedom to choose how and when the Driver works. A Driver is able to log on and log off the application whenever he or she chooses and the Respondent does not impose any minimum period that a Driver must be logged on to the application. 50 Additionally, the Respondent does not impose any disciplinary procedures on a Driver if a Driver chooses not to log onto or not log off the Partner App.51

[22] Whilst a Driver is logged onto the application, he or she has complete discretion as to whether the Driver accepts a trip request from a Rider. 52 The Respondent does not impose requirements or conditions on a Driver that, in order to use the application, a Driver must accept a minimum number of trip requests during the time in which the Driver is logged onto the application.53 This was not always that case. During the period from June 2016 to March 2017, a Driver would be automatically logged off the application and not be able to log back on again for two minutes if the Driver did not accept consecutive trips on three consecutive occasions.54 However, since March 2017 the two minute delay was removed so that Drivers could log back onto the application immediately.55

[23] A Driver also has discretion as to the areas or locations within which the Driver wants to provide trips, however, the Driver must remain within the State in which the account is active and must be within areas that the Rider App is available. 56

[24] The relationship between Drivers and the Respondent is not exclusive. If a Driver wants to utilise another software application to provide transportation services, the Driver may do so, nor is the Driver prevented from providing other kinds of services or from obtaining or holding employment whilst having an active account in the Partner App. 57

Payments by Riders to Drivers

[25] Riders pay Driver’s a fare for each trip that a Driver provides. 58 A fare is made up of multiple components including a base fare component, a time and distance component and a booking fee component.59 A minimum fare also applies and there may be additional charges for tolls, taxes or other fees such as airport charges.60 A cancellation fee of $10 may also be charged to a Rider if the Rider cancels a trip request five minutes after making the request and the Driver has accepted the request and is proceeding to the Rider’s location.61

[26] The fare or cancellation fee is collected by the Respondent as part of the payment collection services the Respondent provides to Drivers under the Services Agreement. 62 The Respondent sends a receipt, by email, to the Rider on behalf of the Driver showing either the fare for the trip or the cancellation fee.63 The fare or the cancellation fee payable by Riders is inclusive of all taxes, such as GST, applicable in the jurisdiction in which the Driver is registered.64 From 1 June 2017, if a Driver had advised the Respondent that they are registered for GST, the Respondent generates a trip invoice which identifies the GST payable and other relevant information such as an ABN and legal name.65

[27] The Respondent remits the fares and cancellation fees, after deduction of a service fee which is discussed below, to the Driver on a weekly basis and, since February 2017, at the request of a Driver at any time. 66

Payments by Drivers to the Respondent

[28] Clause 4.4 of the Services Agreement provides the following:

“Service Fee. In consideration of Rasier Pacific’s provision of the Uber Services, you agree to pay Rasier Pacific a service fee on a per Transportation Services transaction basis calculated as a percentage of the Fare (regardless of any Negotiated Fare), as provided to you via email or otherwise made available electronically by Rasier Pacific from time to time for the applicable Territory (“Service Fee”). Unless regulations applicable to your Territory require otherwise, taxes will be calculated and charged on the Fare, and Rasier Pacific shall calculate the Service Fee based on the Fare inclusive of such taxes. Rasier Pacific reserves the right to change the Service Fee at any time in Rasier Pacific’s discretion based upon local market factors, and Rasier Pacific will provide you with at least 14 days’ notice in the event of such change. If Rasier Pacific increases or provides notice of an intention to increase the Service Fee, you have the right to terminate the Agreement immediately, without notice. Continued use of the Uber Services after any such change in the Service Fee calculation shall constitute your consent to such change.” 67

[29] The Service Fee is the only payment that is made by a Driver to the Respondent.

Service Standards

[30] A requirement of providing transportation services to Riders, is that Drivers accept and meet certain service standards which are identified in the Services Agreement, policies and communications. 68 The service standards are contained in the Community Guidelines which apply to Drivers and Riders.69 They can also be found in the Driver Deactivation Policy.70 The service standards are aimed at protecting the “Uber” brand and aim to ensure that customer satisfaction and safety requirements are maintained.71

[31] In order to assess whether a Driver meets the service standards, the Respondent relies on Rider’s ratings of the Driver. 72 The ratings are averaged to provide an overall rating.73 If a Driver is failing to meet the service standards, the Respondent may deactivate the Driver’s account and only reactivate it if it is satisfied that the Driver has taken steps to improve the quality of the service.74 Although Drivers are required to meet service standards, they are otherwise able to provide a trip in any manner they deem appropriate.75

Equipment used by Drivers

[32] The Respondent does not provide any of the equipment (save for the technology platform) that is required by a Driver to enable the provision of transportation services. A Driver is required to supply and maintain his or her own vehicle in accordance with the service option that the Driver chose, and to which earlier reference has been made. 76 Additionally, a Driver uses his or her own smartphone or similar device which requires access to a wireless data plan.77 It is the Driver’s responsibility to bear the cost of operating the device and wireless data plan.78

Uniform and branding

[33] Clause 2.4 of the Services Agreement, which is extracted above, highlights that a Driver is prohibited from wearing a uniform or any other form of clothing displaying the Respondent’s or any of its affiliates’ names, logos or colours. 79 Additionally, Drivers are prohibited from displaying any logos or colours which are affiliated with the Respondent on any vehicle in which trips are provided by Drivers.80

Insurance

[34] Clauses 8.2 and 8.3 of the Services Agreement deal with the kind of insurance that a Driver must maintain whilst providing transportation services and provide the following:

“You agree to maintain during the term of this Agreement on all Vehicles operated by you under this Agreement automobile liability insurance that provides protection against bodily injury and property damage to yourself, your passengers and third parties at levels of coverage that satisfy the minimum requirements to operate a private passenger vehicle on the public roads within the Territory. This coverage must also include any other insurance required by law for the operation of a motor vehicle in the Territory that may not be waived by an insured. You agree to provide Rasier Pacific a copy of the insurance policy, policy declarations, proof of insurance identification card and proof of premium payment for the insurance policy required in this clause 8.2 upon request. Furthermore, you must provide Rasier Pacific with written notice of cancellation of any insurance policy required by Rasier Pacific. Rasier Pacific shall have no right to control your selection or maintenance of your policy. You must be a named insured or individually rated driver, for which a premium is charged, on the insurance policy required in this clause 8.2 at all times.

In relation to the Transportation Services, you agree that you are not an employee, or a worker or a deemed worker for the purposes of any workers compensation laws and therefore acknowledge that Rasier Pacific does not, and is not required to, maintain or provide you with workers’ compensation insurance or maintain other occupational accident injury insurance on your behalf. You agree to maintain at your cost during the term of this Agreement workers’ compensation insurance or other occupational accident injury insurance (or the local equivalent) as required by any applicable law in the Territory (provided that the foregoing shall have no impact on the mutual understanding between you and Rasier Pacific that you are a self-employed individual (including from a labour and social security perspective)) and otherwise comply with all statutory workers compensation requirements. If permitted by applicable law, you may choose to insure yourself against industrial injuries by maintaining occupational accident insurance in place of workers’ compensation insurance. Furthermore, if permitted by applicable law, you may choose not to insure yourself against industrial injuries at all, but do so at your own risk.” 81

Termination of the Services Agreement

[35] Clause 12.2 of the Services Agreement states that either the Respondent or a Driver can terminate the Services Agreement at any time. 82 When the Services Agreement is terminated, a Driver’s account in the Partner App is deactivated.83 Clause 12.2 also states that the Respondent may terminate the Services Agreement at any time, without notice, if the Driver no longer meets the legislative requirements under the applicable law or the standards and policies of the Respondent, such as the Deactivation Policy.84

[36] The Deactivation Policy outlines the circumstances in which a Driver’s account may be deactivated by the Respondent. Some of the circumstances which may lead to deactivation include:

•  if the Driver’s overall rating (as described in paragraph 53 above) continually falls below the minimum average rating for the location in which they provide trips;

•  if the Driver's account in the Partner App is associated with fraudulent activity;

•  if the Driver engages in unsafe driving or related behaviour; and/or

•  if the Driver does not follow the Community Guidelines, which are applicable to Riders and Driver-Partners. 85

[37] None of the matters that I have outlined in [4] to [36] is seriously contested by the Applicant. The relationship between the Respondent and Drivers described in [4] – [36] applied as between the Respondent and the Applicant during the engagement until the time of deactivation on 11 August 2017, which the Applicant says was the date of the dismissal.

The relationship between the Applicant and the Respondent

[38] On 29 August 2017, the Applicant entered into the Services Agreement with the Respondent. The Applicant provided all of the mandated documentation to the Respondent including vehicle registration, insurance certificates and proof of identity. On 11 August 2017, the Respondent deactivated the Applicant’s access to the Partner App for reasons which are outlined further below. 86

[39] Whilst the Applicant was a Driver, he:

•  logged into the Partner App at varying times;

•  logged into the Partner App for varying periods;

•  logged into the Partner App on multiple occasions on some days and did not log in at all on others;

•  provided varying numbers of trips when he was logged into the Partner App, including providing no trips on some occasions when he was logged into the Partner App;

•  did not accept 33% of the trip requests sent to him via the Partner App (that is, 2,961 of a total of 8,877 sent); and

•  cancelled 15% of the trip requests that he had received and accepted via the Partner App (that is, 804 of the 5,542 he had accepted). 87

[40] This is not in contest.

[41] Whilst the Applicant was a Driver, the Respondent issued invoices to Riders on behalf of the Applicant, collected fares and cancellation fees on behalf of the Applicant and remitted those monies to the Applicant excluding the service fee. 88 The number and quality of the invoices issued and the manner in which they were issued is in dispute but these matters need not be resolved in this application. The dispute about these matters concerned the Applicant’s capacity to lodge a tax return and other information with the Australian Taxation Office (ATO).89

[42] On 11 August 2017, the Respondent terminated the Services Agreement between it and the Applicant in accordance with the Deactivation Policy. 90According to Mr Groeneveld’s (State Manager, Victoria and Tasmania) witness statement, the Services Agreement was terminated as a result of the Applicant failing to meet the service standards by failing to maintain an adequate overall rating.91

Legislative Framework

[43] A person is only protected from unfair dismissal under the Act, if the person is an employee as defined. This notion is further qualified by the specific requirements of s.382 of the Act, which are expressed as follows:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[44] Section 380 makes clear that “employee” in Part 3-2 of the Act in which s.382 is found means a national system employee. However, in the case of an employee in Victoria, as Victoria is a referring State within the meaning of s.30B of the Act, the extended meaning of national system employee in s.30C applies. In effect, with the exception of a limited number of senior public servants and office holders in Victoria, persons who are “employees” whether or not employed by a national system employer fall within the provisions of Part 3-2 of the Act.

Consideration

[45] Whether the Applicant was an employee for the purpose of an application for an unfair dismissal remedy made under s.394 of the Act is one of jurisdictional fact.

[46] It is well established that the unfair dismissal provisions in Part 3-2 of the Act apply to a person who was at the time of the dismissal, an employee as defined. It is evident from the legislative scheme the scope of persons who will fall within the definition will depend on, inter alia, whether the State in which the person was, at the time of the dismissal, a referring State, and the extent to which persons in that State, who are otherwise not within the narrow definition of a national system employee, are included in the referral of legislative power from the relevant State to the Commonwealth. There are also well established case law principles that have been developed by the courts and this tribunal to determine whether an individual is an employee. The courts have developed a multi-factorial approach, in which there is no single decisive criterion, to determine whether a contractual relationship is one of employment or one subject to a contract for services. 92  That approach is usually applied in two areas where the distinction is important: first in disputes about the duties and obligations owed by the contracting parties to each other; secondly in disputes about whether one party is liable to a third party for injury caused by the other party in the performance of the contract.93 The usual premise for the application of this approach is the existence of a contract whereby one person is engaged and paid by another for the provision of work or services, thus requiring the contract to be properly characterised in order to determine the parties’ rights and obligations. The various criteria or indicia about which have account is under this multi-factorial approach, were comprehensively listed in Jiang Shen Cai trading as French Accent v Do Rozario94, and have to a significant degree been shaped by that employee/independent contractor dichotomy.

[47] The Respondent submits that, taking into account those well-established principles, based on a proper consideration of the contractual relationship including the lack of the wages-work bargain together with the provisions in the Services Agreement, it can in no way be concluded that an employment relationship between the Applicant and the Respondent existed. I consider that this is manifestly correct.

[48] For there to exist an employment relationship, certain fundamental elements must be present. A contract of employment is, at its essence, a work-wages bargain, so that the “irreducible minimum of mutual obligation” necessary to create such a contract is an obligation on the one side to perform the work or services that may reasonably be demanded under the contract, and on the other side to pay for such work or services. 95 

[49] As discussed above, the ride-sharing application operates across two smart phone applications. Riders and Drivers are connected through the applications for the purposes of requesting and providing private transportation services. The Respondent submits that the Services Agreement between the Applicant and the Respondent recorded a fairly simple business arrangement: in return for payment of the service fee from the Applicant to the Respondent, the Respondent provided lead-generation services and other ancillary services, such as payment and collection processing, customer support and so on. 96

[50] The Respondent says that there are particular terms contained within the Services Agreement that decisively support the existence of an independent contractor relationship, including:

“(a) sub-clause 2.3 provided that the Applicant's provision of transport services to users (referred to as Users or Riders) "creates a legal and direct business relationship between you and the User, to which Rasier Pacific and its Affiliates are not a party";

(b) sub-clause 2.4 provided, amongst other things, that the Applicant contained the sole right to determine when and for how long he would use the Partner App or the Uber Services (as defined in the Services Agreement) and that he retained the option, via the Partner App, to accept or ignore a Rider's request for transportation services. Further, the sub-clause also provided that the Applicant retained the complete right to use other software application services to provide transport services and to engage in any occupation or other business;

(c) sub-clause 4.1 provided that the Applicant was entitled to charge a fare for each transportation service (referred to in Mr Groeneveld's statement as a "trip") provided to a Rider, the Applicant appointed the Respondent as his "limited payment collection agent solely for the purpose of accepting the fare" and that the Applicant agreed that payment made by Riders to the Respondent shall be considered the same as payment made directly by Riders to him. The sub-clause also made it clear that the Applicant ultimately had the right to charge a fare less than the maximum fare recommended by the Respondent;

(d) sub-clause 4.4 provided that in return for the Respondent providing the Applicant with the "Uber Services" (including lead-generation services, payment collection and processing services and support services), the Applicant agreed to pay the Respondent a service fee on a per transportation service transaction basis, calculated as a percentage of the fare.” 97

[51] The Respondent submits that it is evident from the above extracts that the wages-work bargain which is essential to an employment relationship is missing. 98 The Respondent does not owe any legal obligation to the Applicant except to provide access to the Partner App and remittance of the fares and cancellation fees that the Rider pays to the Driver. None of this was seriously challenged by the Applicant. The Respondent contends that on this point alone, the Applicant’s application fails. I agree. It is, I consider, in this case clear on the facts that these fundamental elements of an employment relationship did not exist as between the Applicant and the Respondent. I briefly restate the uncontested evidence set out earlier to make good this conclusion. First, neither under the terms of the Services Agreement between the parties nor under the arrangement as it operated in practice was the Applicant required to perform any work or provide any services for the benefit of the Respondent. As the evidence plainly establishes, the Applicant was free to perform as much or as little work with it as he liked. In providing a transportation service to riders, the Applicant did so when, where and for whom he saw fit, without any further reference to the Respondent. In the provision of the transportation service to a Rider, the Applicant was not performing any contractual obligation he owed to the Respondent. Secondly, the Respondent did not make any payment to the Applicant for the provision of any work or services. Rather, the Applicant was charged a service fee by the Respondent calculated as an agreed percentage of the fee paid by the Rider for the trip in consideration for certain services provided by the Respondent to the Applicant to which reference has earlier been made. The work-wages bargain is plainly absent. There was no employment relationship between the Applicant and the Respondent with the consequence that the Applicant was not an employee and was thus not a person protected from unfair dismissal.

[52] Additionally, or alternatively, applying the more usual approach to which earlier reference was made, there are a number of other indicia to which the Respondent points which also weigh against a conclusion that there was in existence, an employment relationship between the Applicant and the Respondent.

[53] In Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario 99, a Full Bench of the then Fair Work Australia helpfully summarised the general law approach to distinguishing between employees and contractors as follows:

(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.
(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.
(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.
(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd  and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

● Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like. 

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.
“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

● Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

● Whether the worker has a separate place of work and or advertises his or her services to the world at large.
● Whether the worker provides and maintains significant tools or equipment. 

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

● Whether the work can be delegated or subcontracted. 

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor . This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

● Whether the putative employer has the right to suspend or dismiss the person engaged. 
● Whether the putative employer presents the worker to the world at large as an emanation of the business. 

Typically, this will arise because the worker is required to wear the livery of the putative employer.

● Whether income tax is deducted from remuneration paid to the worker. 
● Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks. 

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

● Whether the worker is provided with paid holidays or sick leave.
● Whether the work involves a profession, trade or distinct calling on the part of the person engaged. 

Such persons tend to be engaged as independent contractors rather than as employees.

● Whether the worker creates goodwill or saleable assets in the course of his or her work. 
● Whether the worker spends a significant portion of his remuneration on business expenses. 
It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.
(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu. 100

Control

[54] In this application, the Applicant, on the evidence, appears to have had complete control over the way in which he wanted to conduct the services he provided. The Applicant was able to choose when to log in and log off the Partner App, he had control over the hours he wanted to work, he was able to accept or refuse trip requests (with some caveats) and he was free to choose how he operated and maintained his vehicle. All of these factors weigh in favour of an independent contractor relationship.

[55] However, weighing against these factors is the control the Respondent exercises over the Applicant and its other drivers. The Respondent submits that the Services Agreement reserves the Respondent’s right to multiply fares depending on the demand for drivers at a particular point in time. 101 For example, at high peak times such as New Year’s Eve where there is a significantly high demand for transportation services, the Respondent may increase the rate at which fares are charged. The Services Agreement also provides service standards that the Respondent enforces to protect the Uber brand and Riders such as maintenance of the vehicle and safe driving practices. Although these factors show some control, they are not overwhelmingly strong factors. Moreover, evidence of the kinds of control commonly associated with employment, principal amongst them, the obligation to attend work and to perform work when in attendance.

Equipment

[56] In this case, the Applicant is required to provide his own capital equipment.. That is, in order to use the Partner App and charge fares, the Applicant supplied his own vehicle, smart phone and wireless data plan. Without these, the Applicant could not provide transportation services of the kind he provided. Additionally, the Applicant at his own cost, maintained a valid registration and full comprehensive insurance on the vehicle. Notably, clause 8 of the Services Agreement provides that the parties agree that a Driver is not an employee, a worker or a deemed worker for the purposes of workers compensation nor does the Respondent maintain any workers compensation insurance for that purpose. Registration, insurance and other like expenses are in no way borne by the Respondent and this weighs significantly in favour of a conclusion that the relationship was that of principal and independent contractor.

Uniform

[57] The Applicant did not and was not permitted to display any of the Respondent’s or its affiliates names, logos or colours on his vehicle. He did not and was not required to wear any uniform or other clothing which illustrates to the world that he was attached to or connected or associated with the Respondent or the Uber brand. This is a factor that weighs against a conclusion of an employment relationship.

Goods and Services Tax (GST)

[58] Clause 4.8 of the Services Agreement provides that the Applicant was required to register for GST and remit all tax liabilities. The income received by the Applicant was not treated by the parties as subject to PAYG tax. The Australian Taxation Office (ATO) mandates that individuals who are engaged in ride sharing must obtain an Australian business number, register for GST, pay GST on the full fare, only claim GST credit related to transporting passengers, lodge business activity statements and know how to issue a tax invoice. 102 The Applicant, was expected to maintain his own private taxation affairs and the Respondent does not deal with the Australian Taxation Office on behalf of its drivers. The fact that the Applicant and all Drivers are expected to pay their GST weighs in favour of an independent contractor relationship.

[59] During the proceeding the Applicant produced a document from the ATO sent to the Applicant’s accountant. Put simply, the document provided that the ATO’s records indicated that the Applicant was required to lodge a tax return as his employer had withheld tax from payments made to him during the year. On reviewing the document it appeared to be akin to a request to lodge a Business Activity Statement (BAS). Notably, the document did not state the employer’s identity. The Applicant did not call his accountant to give evidence about the contents of the letter nor anyone from the ATO. During cross-examination, the Applicant asked Mr Groeneveld whether the Respondent had withheld any taxes whilst he was active in the Partner App and Mr Groeneveld said it had not. 103 In any event, the letter does not establish an employer/employee relationship as between the Applicant and the Respondent.

Description of relationship

[60] Clause 13 of the Services Agreement outlines the limited relationship between the Respondent and the Applicant. The relationship is said to be limited to the Respondent acting as a payment collection agent and providing technology services. Simply labelling a relationship as that of independent contractor alone does not necessarily equate to the relationship being just that. However, when the totality of the relationship, together with the fact that the Applicant and Respondent agreed that the relationship was solely of one independent contractor, it is difficult to conclude that the arrangement is anything other than that which the parties themselves described.

Other indicia

[61] It is clear from the evidence that the Applicant does not receive a wage but rather receives a proportion of the fee charged for the trip. It is also apparent that the Applicant is responsible for his own taxation affairs and does not accrue the usual concomitants of employment such as annual, sick and long service leave. The Respondent also does not make any superannuation contributions on behalf of or for the benefit of Drivers. These are matters which all point away from the existence of an employment relationship.

[62] As to the question of the extent of any integration of the Applicant into the Respondent’s organisation, although Drivers are necessary in order that the Respondent can generate income, there is little material from which it may be concluded that there is any significant integration. Ultimately, in this case, this consideration is neutral.

The Applicant’s Submissions

[63] Through his witness statement and during the proceeding the Applicant made a number of submissions which he says support the characterisation of the relationship being one of employer/employee. Clause 4.1 of the Services Agreement stipulates that a Driver can charge a lower fare if he or she wishes to do so. The Applicant says that if he was truly an independent contractor, he would be able to charge a lower or higher fare without being restricted by what the Respondents Services Agreement. 104 That is a factor, but when weighed against all of the indicia going the other way, it is not significant.

[64] As the transcript reveals, the Applicant made a number of other submissions which are not reproduced here, but which, with respect, are not relevant to the issue I need to decide. The Applicant also submitted that I should take into account the recent United Kingdom decision of Aslam and others v Uber B.V. and others 105 (Aslam) in which the Employment Tribunal concluded that an Uber driver was a worker for the purpose of the Employment Rights Act 1996 (UK) (ER Act).106 Although the Uber operations in both the United Kingdom and Australia are similar, the legislation at issue in Aslam is materially different to that which governs this application. Aslam was decided on the basis of an expanded definition of a “worker” reproduced below, which is self-evidently broader than the definition of an employee and encapsulates some independent contractors. Relevantly, the ER Act defines a ‘worker’ as follows:

“230 Employees, workers etc.

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

(3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

(a) a contract of employment, or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly.

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

(5) In this Act “employment”—

(a) in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(c) in relation to a worker, means employment under his contract;

and “employed” shall be construed accordingly.

…”

[65] As is evident in Aslam at [70], [85] – [98] the Employment Tribunal concluded that the Driver fell within the extended definition in s.230(3)(b). The Tribunal did not expressly conclude that the driver was caught by s.230(3)(a). The decision in Aslam is of no assistance to the Applicant. 107

Conclusion

[66] The notion that the work-wages bargain is the minimum mutual obligation necessary for an employment relationship to exist, as well as the multi-factorial approach to distinguishing an employee from an independent contractor, developed and evolved at a time before the new “gig” or “sharing” economy. It may be that these notions are outmoded in some senses and are no longer reflective of our current economic circumstances. These notions take little or no account of revenue generation and revenue sharing as between participants, relative bargaining power, or the extent to which parties are captive of each other, in the sense of possessing realistic alternative pursuits or engaging in competition. Perhaps the law of employment will evolve to catch pace with the evolving nature of the digital economy. Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy. But until then, the traditional available tests of employment will continue to be applied.

[67] It seems to me plainly to be the case that the relevant indicators of an employment relationship are absent in this case. The overwhelming weight of the relevant indicia point the other way. In my view and for the reasons given earlier, the Applicant was not an employee for the purposes of s.382 of the Act at the time of the ending of the relationship between the Applicant and the Respondent. He is therefore not a person protected from unfair dismissal. The application must be dismissed.

[68] An order giving effect to my decision is separately issued in PR598990.

DEPUTY PRESIDENT

Appearances:

Mr M Kaseris, appeared in person

Mr R Dalton, Counsel together with Ms C King, Solicitor for Rasier Pacific V.O.F

Hearing details:

2017.

December 8.

Melbourne.

 1   Form F2 – Unfair dismissal application, dated 29 August 2017 at 1.2

 2   Respondent’s Outline of Submissions, dated 14 November 2017 at [3]

 3   Exhibit 1, Witness Statement of Mr Lucas Groeneveld, dated 14 November 2017 at [28]. See also Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 6

 4   Ibid

 5   Exhibit 1 at [28]

 6   Ibid at [3]

 7   Ibid

 8   O’Connor and others v Uber Technologies, Inc., 82 F. Supp. 3d, 1133 (N.D. Cal. 2015)

 9   Exhibit 1 at [4]

 10   Ibid

 11   Ibid

 12   Ibid at [8]

 13   Ibid

 14   Ibid at [9]

 15   Ibid

 16   Ibid

 17   Ibid at [10]

 18   Ibid

 19   Ibid at [11]

 20   Ibid at [12]

 21   Ibid

 22   Ibid at [13]

 23   Ibid

 24   Ibid at [14]

 25   Ibid

 26   Ibid

 27   Ibid

 28   Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 3

 29   Exhibit 1 at [15]

 30   Ibid

 31   Ibid at [16]

 32   Ibid

 33   Ibid

 34   Ibid

 35   Ibid at [17]

 36   Ibid at [18]

 37   Ibid at [19]

 38   Ibid at [20]

 39   Ibid at [21]

 40   Ibid at [22]

 41   Ibid

 42   Ibid at [23]

 43   Ibid

 44   Ibid at [24]

 45   Ibid

 46   Ibid

 47   Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 3

 48   Ibid

 49   Exhibit 1 at [29]

 50   Ibid at [33]

 51   Ibid at [34]

 52   Ibid at [35]

 53   Ibid

 54   Ibid at [36]

 55   Ibid

 56   Ibid at [37]

 57   Ibid at [38]

 58   Ibid at [40]

 59   Ibid

 60   Ibid

 61   Ibid at [42]

 62   Ibid at [43]

 63   Ibid

 64   Ibid at [44]

 65   Ibid

 66   Ibid at [45]

 67   Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 3

 68   Exhibit 1 at [51]

 69   Ibid

 70   Ibid

 71   Ibid at [52]

 72   Ibid at [53]

 73   Ibid

 74   Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 8

 75   Exhibit 1 at [54]

 76   Ibid at [58]

 77   Ibid

 78   Ibid

 79   Ibid at [59]

 80   Ibid at [60]

 81   Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 3

 82   Exhibit 1 at [64]

 83   Ibid

 84   Ibid at [65]

 85   Ibid at [67] and Respondent’s Outline of Submissions, dated 14 November 2017 at Annexure 8

 86   Exhibit 1 at [68]

 87   Ibid at [70]

 88   Ibid at [76] – [77]

 89   Transcript, 8 December 2017 at PN205 – PN243

 90   Exhibit 1 at [79]

 91   Ibid

 92   Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 per Mason J

 93   ACE Insurance Limited v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146 at [26]-[27] per Buchanan J

 94   [2011] FWAFB 8307

 95   See for example Forstaff Pty Ltd v Chief Commissioner of State Revenue [2004] NSWSC 573; (2004) 144 IR 1 at [90]-[91]; Building Workers' Industrial Union of Australia v Odco Pty Ltd [1991] FCA 87; (1991) 29 FCR 104 at 114; Automatic Fire Sprinklers Pty Ltd and Another v Watson [1946] HCA 25; (1946) 72 CLR 435 at 465 per Dixon J

 96   Respondent’s Outline of Submissions, dated 14 November 2017 at [16]

 97   Ibid at [17]

 98   Ibid at [18]

 99   [2011] FWAFB 8307

 100   Ibid at [30]

 101   Respondent’s Outline of Submissions, dated 14 November 2017 at [21]

 102   Australian Taxation Office, Government of Australia, Ride-sourcing and tax (14 September 2017) <https://www.ato.gov.au/general/ride-sourcing-and-tax/>

 103   Transcript at PN202

 104   Transcript at PN116 – PN143

 105   [2017] IRLR 4 (ET)

 106   Ibid

 107   An appeal from the decision of the Employment Tribunal was dismissed see Uber B.V and others v Aslam and others (Appeal No. UKEAT 0056/17/DA

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