The Uber Eats Decision: Australia’s FWC Full Bench misses the chance to see through the gig economy’s sophistry

Anthony Forsyth, RMIT University and Labour Law Down Under Blog

On 21 April 2020, a Full Bench of the Fair Work Commission ruled that an Uber Eats delivery driver (Amita Gupta) could not bring an unfair dismissal claim as she was an independent contractor rather than an employee.

This appeal decision reflects the persistent reluctance of Australia’s workplace tribunal and regulator to understand the realities of gig work relationships and intervene accordingly.

The Uber Eats decision is the most authoritative Australian ruling yet on the work status of platform workers. It follows a series of first-instance FWC decisions that have denied employment status to Uber drivers,[1] and a Fair Work Ombudsman investigation that reached the same conclusion. This meant there was no basis for the FWO to scrutinise whether Uber is complying with awards or other legal protections of minimum standards for drivers (see this post on the FWO outcome).

The only push in the opposite direction came from a 2018 FWC ruling that Foodora delivery rider, Josh Klooger, was an employee and had been unfairly dismissed.[2] That decision came after Foodora had abruptly fled the Australian market.

The Uber Eats case – Ms Gupta’s unfair dismissal claim

Ms Gupta performed delivery services for Uber Eats from December 2017 to January 2019. She brought an unfair dismissal claim following the platform’s suspension – then permanent blocking – of her access to the Uber Eats app. This was allegedly because she had failed to meet Uber Eats’ standards for timely delivery.

The claim was brought against Portier Pacific Pty Ltd and Uber Australia Pty Ltd, two entities involved in facilitating the delivery of meals from restaurants to customers by drivers, via the Uber Eats app. Both entities denied the existence of any employment relationship with Ms Gupta.

The parties to the service agreement under which Ms Gupta worked were Portier Pacific (a payment collection agent that invoices restaurants and transfers payments to delivery drivers) and Uber Portier BV (a Dutch-registered company that provides the various apps enabling Uber Eats to operate and controls the data flowing through those apps).

At first instance, the FWC determined that Ms Gupta did not have any relationship with Uber Australia (which provides marketing and support services to various Uber entities); and that she was not an employee of Portier Pacific.[3] Commissioner Hampton took the view that although Ms Gupta was subject to various forms of ‘soft control’, such as customer ratings and suggested delivery routes linked to delivery fees, she ultimately had ‘very significant control over the way she wanted to conduct the services she provided’.

In forming the conclusion that Ms Gupta was an independent contractor, the FWC also relied on the approach in the earlier Uber decisions which placed great store on the apparent absence of any obligation on drivers to perform work – they could choose when to log on and off, and could accept or refuse driving requests. This meant the wages-work bargain inherent in the employment relationship was not present in the context of Uber and Uber Eats’ relationships with their drivers.

The FWC Full Bench’s decision on appeal (https://www.fwc.gov.au/documents/decisionssigned/html/2020fwcfb1698.htm)

Ms Gupta had been represented by her husband at first instance. With the assistance of the Transport Workers Union, she brought an appeal arguing that she was at law an employee of Portier Pacific and therefore eligible to pursue an unfair dismissal claim.

Portier Pacific denied there was any relationship between it and Ms Gupta at all (much less an employment relationship). Rather she performed delivery tasks under a contract with each restaurant, Portier Pacific simply acting as a payment collection agent between her and the restaurant.

In their joint decision on the appeal, Justice Ross and Vice President Hatcher of the FWC examined the terms of the service agreement entered into between the parties, the Uber Eats ‘Community Guidelines’ establishing standards applicable to drivers and Uber Eats’ agreement with restaurants.

They found that there was no contractual relationship between Ms Gupta and any of the restaurants whose meals she delivered to customers; the obligations relating to the performance of delivery work were set down in the service agreement and Uber Eats’ guidelines, including a ratings system that meant she was at risk of expulsion from the app if the standards were not met; and payment for the delivery work was entirely within the control of Portier Pacific (it set the delivery prices, not the restaurants).

On this basis Justice Ross and Vice President Hatcher stated:

In summary, we consider that Portier Pacific engaged Ms Gupta to perform delivery services for it, and paid her for them, as part of a business by which it delivered restaurant meals to the general public. On that basis, the minimum reciprocal obligations of work and payment can be said to exist.[4]

In determining, next, whether Ms Gupta was an employee of Portier Pacific on the application of the common law test, Justice Ross and Vice President Hatcher analysed the High Court’s decision in Hollis v Vabu[5] where bicycle couriers had been found to employees of the courier company. In another decision, the NSW Court of Appeal had determined that couriers using vehicles to perform services for the same company were independent contractors.[6]

Justice Ross and Vice President Hatcher identified the factors (according to the common law test) present in the Gupta-Portier Pacific relationship as follows:

Neutral

• The fact that Ms Gupta was required to provide her own vehicle and mobile phone to perform the work for Uber Eats (these were also used for personal purposes).
• The degree of control exercised by Portier Pacific through the agreement, guidelines and rating system. A principal can also impose performance standards on an independent contractor.
• The method of payment (on a per delivery basis), the absence of leave or superannuation benefits, and non-deduction of tax.

Employment

• No special skills or qualifications were required to perform the work.
• Delivery rates were set by Portier Pacific.
• ‘There was no aspect of her work which would permit it to be characterised as the carrying on of an independent business or enterprise: she had no means of independently expanding her customer base or generating additional work within the Uber Eats business or of establishing goodwill with any of the restaurants or customers with whom she dealt.’[7]
• Ms Gupta could not delegate performance of the work, as facial recognition software was required to enable her to log onto the app.

Contractor

• Portier Pacific had no control over when or for how long Ms Gupta worked, which was entirely within her control both legally and practically. Further: ‘Once logged on, there was no obligation upon her to accept any particular delivery request.’[8]
• Even when logged onto Uber Eats, she could accept work through other food delivery apps or perform other similar work – as long as her ability to make timely deliveries for Uber Eats was not compromised: ‘This was not a case of a merely nominal right which cannot practically be exercised; in this case, there is no evidence of any practical impediment to her doing this, although she did not in fact choose to do it.’[9]
• She was not put forward as an emanation of the Uber Eats business, e.g. she did not wear a uniform and her car did not have any logos. She was not required to represent a connection to Uber Eats ‘beyond what was necessary to collect the particular meal from the restaurant and deliver to the customer.’[10]

Justice Ross and Vice President Hatcher considered that the last three factors were ‘critical’ in ‘point[ing] decisively away from a finding of employment and provide a significant point of distinction from the factual scenario considered in Hollis v Vabu’.[11] They therefore determined that Ms Gupta’s relationship with Portier Pacific did not bear:

a number of the usual and essential hallmarks of an employment relationship, namely a requirement to perform work at particular times or in particular circumstances, exclusivity when work is being performed, and presentation to the public as serving in the business. For these reasons we conclude she was not an employee of Portier Pacific.[12]

In a separate decision, Deputy President Colman agreed that the appeal should be dismissed – but went further in finding that there was no commercial relationship between Ms Gupta and Portier Pacific at all. That is, she was not even an independent contractor as she did not undertake delivery work for Portier Pacific. That entity was ‘indifferent as to whether [she] accepted delivery opportunities’.[13] 

Deputy President Colman construed the adverse consequences of deliverers failing to perform a certain volume of work as merely ‘in the nature of a commercial incentive for deliverers to maintain a certain level of engagement in order to retain access to opportunities to do jobs and earn fees.’[14]

In addition, although Ms Gupta may not have been running an enterprise with the usual hallmarks of a business, this did not automatically mean she was an independent contractor for a principal. Rather, she ‘was simply working for herself’.[15]

Assessment of the Full Bench’s decision

The upshot of the FWC Full Bench’s decision is that Ms Gupta – who was found to be devoid of any real prospect of developing an independent business – had no legal recourse when the organisation for which she provides delivery services ended that relationship.

It’s pretty simple really: Ms Gupta performed work over the course of more than a year from which Uber Eats directly benefited. She did not perform work for anyone else. Yet through the interposition of various legal entities and obscure contractual documents, Uber Eats distanced itself from Ms Gupta and any responsibility for her right to decent treatment in the work she performed.

The FWC Full Bench has now sanctioned that exercise in sophistry. The majority members of the Full Bench could allow themselves to see through it in part, for example by rejecting the pretence that Ms Gupta’s only legal relationship was with the restaurants whose food she delivered. Frustratingly, Justice Ross and Vice President Hatcher teased us with the finding that ‘the minimum reciprocal obligations of work and payment’ existed as between Ms Gupta and Uber Eats. But then they promptly walked it back by playing down the various ways in which Uber Eats could and did exercise control over her, and giving far more emphasis to the putative freedom and flexibility of gig work that platforms like Uber Eats love to trumpet.

The majority tried to reconcile the inherent tension in their approach by suggesting that while Ms Gupta had the capacity to develop her own independent business, she just chose not to.[16] The reality was more like this: with the assistance of her husband she was doing delivery work to aid her recovery from several disabilities. This was a means to earn some income in difficult personal circumstances (a not uncommon story for gig workers). Yet we are meant to accept she had the potential to develop this into a more sophisticated delivery business. In truth, she had very little choice in the matter.

Deputy President Colman’s embrace of the sophistry could not be warmer.[17] As he sees it, Uber Eats (and by extension all the other gig platforms) are ‘indifferent’ as to whether rideshare drivers, food deliverers and the millions of other gig workers around the world ever perform any work. That just doesn’t tally with the extraordinary lengths to which these companies have gone to ensure a steady supply of willing, ready and (most of all) compliant workers are at their disposal. It also ignores the platforms’ imposition and use of a range of performance controls through algorithms and ratings systems, and other detailed rules imposed on drivers through Uber Eats’ Community Guidelines.[18] That control was exercised in Ms Gupta’s case: she was cut off the app because she didn’t meet Uber Eats’ timeliness standards. More generally, the platforms are far from indifferent about what gig workers are up to – especially if these workers show any hint of agitating to improve their position by unionising.

This case highlights, yet again, the need for legislative intervention to recognise the reality that work is being performed in the gig economy by workers. In the Australian context, that means employees with the full suite of employment rights – unless it is clearly demonstrated that someone is operating a genuine business on their own account.

[1] Kaseris v Rasier Pacific V.O.F. [2017] FWC 6610; Pallage v Rasier Pacific Pty Ltd [2018] FWC 2579; Suliman v Rasier Pacific Pty Ltd [2019] FWC 4807.

[2] Klooger v Foodora Australia Pty Ltd [2018] FWC 6836.

[3] Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd T/A Uber Eats [2019] FWC 5008.

[4] Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd T/A Uber Eats [2020] FWCFB 1698, paragraph [48]. This analysis was said to supported by the Full Federal Court decisions in Building Workers’ Industrial Union of Australia v Odco Pty Ltd [1991] FCA 87, 29 FCR 104 and Damevski v Giudice [2003] FCAFC 252, 133 FCR 438.

[5] [2001] HCA 44, 207 CLR 21.

[6] Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537.

[7] [2020] FWCFB 1698, paragraph [68].

[8] Ibid, paragraph [69].

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid, paragraph [70].

[13] Ibid, paragraph [78].

[14] Ibid, paragraph [79].

[15] Ibid, paragraph [83].

[16] Ibid, paragraphs [71]-[72].

[17] See also ibid, paragraph [87], where Deputy President Colman states that: ‘Portier Pacific acts as a commercial intermediary between restaurants, customers and deliverers, from which it earns fees. Deliverers use the company’s platform and pay a fee to Portier Pacific to do so. They thereby gain access to opportunities to undertake deliveries and receive a share of the monies paid by the customer.’ In this vein, see further another recent post.

[18] See [2020] FWCFB 1698, paragraph [19] going through the extensive obligations imposed on drivers which add up to employment-like control, discipline and performance management. These include treating people with respect and not engaging in discriminatory conduct, and drivers: ‘must complete deliveries safely, keep to the speed limit, not text while on the road, use a phone mount, never deliver under the influence of alcohol or drugs, and take a break if feeling tired’; ‘may lose their access to Uber Eats temporarily or permanently if their customer rating persistently falls below their city’s minimum threshold, and may lose access immediately in the case of behaviour involving violence, sexual misconduct, harassment, discrimination, illegal activity, or poor, unsafe or distracted driving’; ‘may be logged out of the app if their cancellation rate is much higher than the average for their city, and may lose access to their account if the cancellation rate continues to exceed the maximum limit or if they cause a higher than average cancellation rate from restaurants by not arriving after conforming availability’; and ‘may lose access to their account if they are consistently slow to complete trips and materially deviating from ETAs, subject to prior notification and being given an opportunity to improve’.