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Some online marketplaces connect a service provider and purchaser. Uber is one of the most famous of these marketplaces. However, this can create unclear relationships between the parties. Most notably, is there an employer-employee relationship? The Fair Work Commission (FWC) recently considered this for Uber drivers in Australia. This article explains how FWC decided the Uber unfair dismissal case and what it means for both online marketplaces and service providers.

Background of the Uber Unfair Dismissal Case

In Kaseris v Rasier Pacific V.O.F [2017] FWC 6610, an Uber driver in Victoria (Kaseris) claimed that he was unfairly dismissed by Rasier Pacific V.O.F (Uber). Uber claimed that Kaseris was an independent contractor, which allows them to terminate their arrangement without notice.

When using the Uber app, a driver:

  • can accept a trip request from riders;
  • does not need to accept a minimum number of trips; and
  • cannot use the Uber name, logo or colours as a uniform or on their vehicle.

As a driver, Kaseris:

  • occasionally did not use the app on some days;
  • sometimes would not log any trips, even if the app was on;
  • did not accept 33% of the trip requests and cancelled 15% of trip requests; and
  • had an ‘inadequate’ overall driver rating on the app.

Denial of the Uber Unfair Dismissal Claim

Unfair dismissal can only occur in an employer/employee arrangement. Section 382 of the Fair Work Act 2009 (Cth) protects from unfair dismissal, noting an employee “has completed a period of employment with his or her employer for at least the minimum employment period.” The legal question, in this case, came down to whether Kaseris was an employee and therefore entitled to the protection of unfair dismissal.

FWC decided that Uber only had obligations to:

  • provide access to the Uber app; and
  • transfer fares and fees to the driver.

FWC decided that Uber’s obligations to Kaseris did not create an employment relationship. Notably, FWC highlighted that:

  • Kaseris chose to work as he wanted;
  • by taking on trips, Kaseris did not perform an existing obligation to Uber; and
  • Uber did pay Kaseris to perform services, but instead paid a percentage of the passenger fare.

As Kaseris was not an Uber employee, he was not entitled to unfair dismissal protections.

What This Means for Online Marketplaces

This case highlights the importance for online marketplace businesses to consider their involvement and control in issuing work to users of the online marketplace. This is particularly relevant in the rising “gig economy” where service providers can easily obtain work from online platforms on a short-term and ad hoc basis. Businesses that may offer such work through their online platforms should consider:

  • the level of control the business will have in assigning work and whether the user will have flexibility on the platform to accept or reject the work;
  • the legal obligations set out for each party in the terms and conditions;
  • how payments will be transferred from one party to the other; and
  • the extent to which a user may be required to wear a uniform or use equipment provided by the business.

Implications for Independent Contractors

For users of online marketplaces such as Uber or Airtasker, it is important to understand your legal relationships between the online marketplace business and your end-customers. The Uber unfair dismissal case shows that service providers may be independent contractors without the same rights as employees. Accordingly, independent contractors should ensure that they:

  • have the requisite insurances in place;
  • register as a business;
  • make the necessary superannuation and tax payments; and
  • are aware of how they will be paid.

By reading and understanding the terms and conditions of the online marketplace, you will have a better understanding of your obligations to the business and your own obligations for operating as an independent contractor.

Key Takeaways

People who provide services to online marketplaces may be either contractors or employees. Although the Fair Work Commission decided that Kaseris was an independent contractor, this will not apply to every scenario. The more obligations a marketplace puts on its service providers, the closer they come to being employees. Marketplaces should be careful that they do not inadvertently enter an employer/employee relationship.

On the other hand, those who provide the services should be prepared to operate as independent contractors. This means meeting legal obligations such as insurance, tax and superannuation.

If you need specific advice on your employment obligations as a marketplace, call Legalvision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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