Australia

The Fair Work Commission rules that Uber partner-drivers are not employees

In a decision handed down on 21 December 2017, Deputy President Gostencnik of the Fair Work Commission, sitting alone, held that an Uber driver seeking an unfair dismissal remedy under the Fair Work Act 2009 (Cth) was not able to pursue that remedy because the driver was not an employee of Uber and therefore not covered by the unfair dismissal regime. In doing so, the Deputy President distinguished the Australian position from the recent UK authority Aslam and others v Uber B.V.and others [2017] IRLR 4 (ET).

The primary basis for the decision was that no 'work-wages bargain' existed between the parties. The Deputy President also considered that the factors that indicated that the relationship between Uber and the driver was that of principal and independent contractor, rather than employer and employee included the following:

  • although Uber exercised some control over the manner in which the driver worked (including by setting ride fares), Uber was not able to impose an obligation to attend work and perform work when in attendance;
  • Uber did not provide any capital equipment (including a vehicle, smart phone and wireless internet connection) to the driver, nor pay for registration or insurance. Rather, that was a cost borne by the driver;
  • the agreement between the organisation and driver stipulated that the relationship between the parties was that of principal and independent contractor and that the driver was not an employee for the purposes of workers' compensation;
  • the driver was not permitted to display an Uber logo on his car. Nor was he required to wear a uniform or otherwise visually represent the Uber brand;
  • the driver was required to obtain an Australian Business Number, register for the Goods and Services Tax and remit all tax liabilities, and was responsible for the entirety of his taxation affairs; and
  • Uber did not pay the driver a wage or contribute to his superannuation, and no leave or other employment entitlements were accrued by the driver.
The High Court of Australia confirms that registered industrial organisations are eligible to represent non-member workers

In its decision Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA 55, the High Court held that a union or registered organisation is entitled to ‘represent the industrial interests’ of an employee in proceedings against his or her employer under a civil penalty provision of the Fair Work Act 2009 (Cth) if the employee is eligible to be a member of the union or organisation, regardless of whether the employee is actually a member or not.

Unions and registered organisations have historically been entitled to represent eligible non-members in industrial matters including right of entry to workplaces, protected action ballots and enterprise bargaining.

The decision of the High Court expands the ability of unions to take action on behalf of individuals who are not members, even in circumstances where there may be no relationship between the union and the relevant employee, where the employee may not wish to bring proceedings against his or her employer, or where the employee has already brought separate proceedings against the employer.

In addition, the Court raised the possibility that the right to represent individuals in industrial matters may not be limited solely to registered organisations, but may also be enjoyed by 'other forms of industrial organisation having a real interest in ensuring compliance with civil remedy provisions in relation to a particular class of persons'. However, as that question was not in issue upon the facts of the case, the Court ultimately declined to answer it.

Federal Court of Australia confirms Fair Work Commission’s cuts to penalty rates

On 11 October 2017, the Federal Court of Australia upheld the February 2017 decision of the Fair Work Commission to reduce penalty rates.

The decision, which was made as part of the Commission's routine four-yearly review of modern awards, reduced the Sunday and public holiday penalty rates payable to employees working under four awards:

  • the General Retail Industry Award;
  • the Pharmacy Industry Award;
  • the Fast Food Industry Award; and
  • the Hospitality Industry (General) Award.

Public holiday penalty rates for workers falling under the Restaurant Industry Award will also be reduced.

The initial decision had been challenged in June by the hospitality union United Voice, which claimed that the Commission had failed in its duty to uphold the living standards of low-paid workers, and did not have the jurisdiction to vary the award. Those claims were rejected by the Federal Court.

The Labor Party in Opposition continues to promise to reverse the cuts if they win government in the next election.

The BEAR Regime is introduced to Parliament for commencement in 2018

The Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2017 was introduced to Federal Parliament on 19 October 2017, and reported upon by the Senate Economics Legislation Committee on 24 November 2017. The legislation will introduce a new Banking Executive Accountability (BEAR) Regime, which seeks to impose higher accountability obligations upon banks and other authorised deposit-taking institutions (ADIs) by making directors, senior executives and other ‘accountable persons’ expressly responsible for any risk management or compliance failures of the institution.

A number of new obligations will apply to ADIs, including:

  • accountability obligations to conduct business with honesty, integrity and due care, deal with the regulator in an open and constructive manner, and take reasonable steps to comply with its obligations and otherwise prevent matters arising which would adversely affect the ADI's prudential standing;
  • registration requirements for accountable persons;
  • provide accountability maps and statements setting out which accountable person bears responsibility for each of the operations of the ADI, along with other notifiable information; and
  • the compulsory deferral of part of the remuneration payable to accountable persons for four years.

The regime will apply to officers of foreign ADIs, as the definition of an ‘accountable person’ will capture any individual with senior executive responsibility for any Australian operations of a foreign ADI. This will include those who are directors or officers of overseas parent entities but are able to manage or otherwise exert control of the Australian operations of the ADI. However, offshore operations of a foreign ADI will not be subject to BEAR.

If passed, the new regime is expected to commence on 1 July 2018.

To read our separate update considering the BEAR draft legislation, click here.