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Milestone Uber settlement avoids gig economy fallout

Uber has settled before the Judge's decision.
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Milestone Uber settlement avoids gig economy fallout

Milestone Uber settlement avoids gig economy fallout

18 January 2021

In a milestone unfair dismissal case, Uber has settled before the Judge's decision, on what would have been the first ruling with significant impacts for gig economy employment rights.  

Amita Gupta worked as delivery driver for Uber Eats from September 2017 to January 2019. She claimed unfair dismissal after being late with a delivery and was cut off from the delivery app. The Fair Work Commission (FWC) ruled it could not look at the case as she was an independent contractor – not an employee. With the backing of the Transport Workers Union (TWU) she appealed the FWC decision in the federal court.

Difficult questions were asked in the proceedings on what constitutes employment status. Uber Eats maintained it was not an employer and described the drivers as ‘delivery partners’.

In the November hearing, Justice Mordecai Bromberg stated, "everybody knows what function Uber plays. The restaurant's function is to prepare the food. Uber's function is to deliver the food; isn't that right?"  However, after the November hearing, Uber settled for a confidential sum. The settlement took place when the judges were considering their verdict.  

There is strong suggestion that the case was not looking favourable for Uber who swiftly settled the matter out of court before the verdict delivery.  TWC’s national secretary Michael Kaine, was confident Uber would have lost. “It is clear from the court hearing that Uber was on the ropes and a settlement … was the only option left to the company in the face of a potential judgment which would have utterly altered how the company and other gig economy companies operate in Australia,” he said.

Upon settling Uber’s response was they would continue to improve the quality of independent work in the country adding they had previously won this case in two hearings before the Fair Work Commission.

The out of court settlement has ruffled some feathers outside of the TWC as it’s believed the case could have set a precedent in employment relationships. There’s been much recent debate on gig economies reclassifying employment status – in the case of Uber Eats – delivery drivers, as ‘employees’. This is a shift from ‘independent contractors’ or ‘delivery partners’. The debate that’s brewing had the TWU pushing for a federal ruling.

Gig economies argue that workers enjoy great flexibility and autonomy – which wouldn’t be the case in non-gig economies. Unions on the other hand argue gig economies should have the same legal requirements as non-gig economy employers. Such requirements include implementing rostered hours, minimum wages and statutory workers compensation.
The bottom line: The case was settled out of court prior to the judge’s decision which would have been the first federal court ruling on the status of gig economy workers. There could have been major implications on how gig economies operate in Australia causing disruption to business models. Should gig economy workers become recognised as employees and have access to unfair dismissal applications? 

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