Uber Drivers are Employees - at least for the moment

Yesterday the Supreme Court delivered its long awaited decision in the Uber litigation - Rasier Operations BV v E Tu Incorporated [2025] NZSC 162 [17 November 2025]. Uber’s appeal was dismissed and the decisions of the Employment Court and Court of Appeal that Uber drivers were employees was upheld. The decision in the case represents a significant victory for Peter Cranney and his co-counsel. 

I have not had the time to consider the decision in detail yet but a few points stand out.

First the decision was 5 – nil, a comprehensive support for the law as currently understood. The Uber case has now been heard by 9 judges -all have rejected Uber’s arguments albeit with some differences in reasoning. Effectively all judgments upheld the understanding of the Employment Relations Act (ERA) s6 “real nature” test first expounded in 2005 in Bryson v Three Foot Six Ltd . In all courts the facts of the relationship between drivers and Uber were seen as clearly leading to the conclusion that drivers were employees.

Some key points are noted below.

The majority decision

The majority of the Court (Winkelmann CJ and Williams and Miller JJ), while not overtly disagreeing with the Court of Appeal were somewhat sympathetic with the “vulnerability” argument developed by Chief Judge Inglis in the Employment Court which saw a close linkage between s 6 of the ERA and the objects of the ERA set out in s 3:  in particular that of “acknowledging and addressing the inherent inequality of power in employment relationships.”

The majority stated: “Inequality of bargaining power may account in the first place for statutory language that requires an employment tribunal to determine the real nature of the parties’ relationship,…it is  the very fact that an employee frequently cannot influence the employer’s chosen terms that gives rise to the need for statutory protection in the first place…. As we have explained above, inequality of bargaining power may also inform the tribunal’s findings as to the real nature of the relationship in any given case. As the Court of Appeal held, it may explain the presence of contract terms “designed to make [a] contract appear to be something other than that which it in reality is”.

The majority also agreed that the Court of Appeal had not been in error in its approach to the contractual categorisation (stated intention in the contract) of the relationship stating that:

It is plain that terms which classify a putative employment relationship as something else cannot be permitted to determine the real nature of that relationship. That would be to allow the parties to decide for themselves whether the legislation applies. An employment tribunal’s task under s 6 is to determine for itself the real circumstances. The parties’ understanding of the legal significance of the terms they employ is but one such circumstance.

and

 “we accept that terms which the parties use in a contract to describe their relationship may be afforded weight in normal circumstances. In this case, however, the Court of Appeal described some of the language in Uber’s documents as “window-dressing” and “fiction”. We agree with the Court of Appeal that no weight need be given to contractual language which disguises the real nature of the relationship. “

The minority decision

The minority judgment of Glazebrook and Ellen France JJ, while not dissenting from the outcome of the case, differed from the majority in taking a somewhat more conservative approach to the “real nature” test.

The minority differed from the majority and held that the Court of Appeal decision was based on an error in law – primarily that the Court of Appeal had discounted the place of intention in its analysis. The minority judgment also appears to interpret the “real nature” test more strictly as primarily an application of the common law tests of intention, control, integration and the fundamental test. The minority took the view that “in our view the proper approach to be applied [to s 6] is the Bryson test without modification. This involves ascertaining the real nature of the relationship between the parties using the common law tests, including their actual intention at the time of contracting.”

The minority also disagreed with relevance of the interconnection between s 3 and s 6 of the ERA taking the position that s3 was irrelevant to the application of the Bryson test.

A Pyrhic Victory?

The Minister of Employment Relations (Brooke van Velden) has already proposed legislation to neuter the Uber decision through the Employment Relations Amendment Bill due for report back on Christmas Eve (I wonder why that date was chosen!!!!). The relevant amendment appears to have been drafted by Uber representatives and the Minister has certainly made it clear that the interests of multi-billion dollar international corporations take precedence over protecting the basic employment conditions of New Zealand workers. Similarly the “we’re sorted government” does not see modern slavery as a priority!

Regardless of this amendment Supreme Court the decision will remain good law when and if Labour repeals the proposed amendment (as they clearly not only should immediately do if elected but should unequivocally undertake to do so now). And if the Government applies the proposed amendment retrospectively, as Uber submitted, the same should be done on its repeal. It is of course possible that the Bill may just prevent new actions, relying on the Uber decision, from being filed or decided. The Equal pay Act amendments provide a precedent for such a move,

Regardless of the amendment passing the Supreme Court  decision is a clear area of future legal risk for Uber.

And a final point

New Zealand law has long provided a minimum floor of rights for new Zealand workers – a minimum wage, annual and statutory holidays, the right to join unions and so on. The Coalition Government is of course restricting increases to the minimum wage and threatening to undermine the existing holidays entitlements.

The minimum floor of rights was developed at a time before the massive growth in precarious work, gig jobs and pseudo-contracting. The failure to reform the law to prevent the use of legal devices and to ensure that working people are entitled to at least a minimum living standard is a national disgrace.

Perhaps most importantly – if Uber had provided its drivers with a decent income and conditions this litigation would have been unnecessary