Fair Work Ombudsman investigating Uber over sham contracting claims

- June 29, 2017 3 MIN READ

Compounding Uber’s recent woes, the Fair Work Ombudsman has confirmed it has commenced an investigation into the rideshare company, looking to determine whether its classing of drivers as ‘independent contractors’ rather than employees complies with federal workplace legislation.

The action has been pushed by driver group Ride Share Drivers United (RSDU), whose representatives met with the Fair Work Ombudsman earlier this month.

The group stated on its website at the time, “We are currently in the process of submitting relevant information, highlighting the sharp contrast current Uber driver working conditions have to Australian fair work laws and standards.

“We feel it is absolutely essential that drivers in the ride share industry – on all platforms – should be classified as casual workers by default and compensated according to law, unless proven otherwise by employer.”

According to RSDU, to be classified as “real subcontractors”, drivers must have more control and be given the ability to do things such as negotiate prices directly with customers, ask for the destination before driving to the pick up location, be allowed to hail street rides, and more.

“Uber currently does it all ‘on behalf of drivers’ while drivers have absolutely no say over any of these important business decisions/functions, in what appears to be a classic ‘sham contracting’ arrangement,” the group stated.

RSDU is asking drivers who have been driving for Uber for a year or more and drive at least 35 hours per week to put evidence forward in the investigation.

An Uber spokesperson, meanwhile, said the company will be happy to assist the Ombudsman with any questions.

“More than 60,000 Australian driver-partners choose to drive using the Uber app because they like to set their own schedule and be their own boss,” the spokesperson said.

RSDU has been protesting against Uber in Australia for some time. Its Melbourne members went on strike in April and May, logging off their driver apps to protest Uber cutting the take home pay of drivers.

Among the demands the group has been asking for are fair pay, with base rates to be brought up to line with those in Sydney; a limit to be put on the hours a driver can work, with the RSDU suggesting the limit be put at 12 hours; for Uber to give drivers a ‘proper due process’ when deactivating drivers; and for Uber to pay GST rather than pass this fee on to drivers.

The group stated at the time it intended to file an official complaint with the Fair Work Ombudsman.

With concerns around the reality of working in the gig economy and the use of the independent contractor model growing, Unions NSW in May announced an agreement to work with Airtasker to deliver workers on the platform better conditions.

Under the agreement, Airtasker will recommend to users “above comparative award rates” when they post jobs, with workers to also be offered an “affordable and flexible” insurance product, similar to workers’ compensation, to cover them against workplace injury and illness.

Airtasker will also continue to work with Unions NSW to introduce a dispute resolution process that will be overseen by the Fair Work Commission, and to ensure best practice workplace health and safety standards are in place to protect both workers and consumers using its platform.

Mark Morey, secretary of Unions NSW, said at the time that the agreement is a big step in improving workplace protection for gig economy workers.

“This agreement is a huge advance for wages and conditions of those working through the Airtasker platform. It establishes an important beachhead for regulating the gig economy. Others should follow Airtasker’s example and consider the ethical dimension of their impact,” he said.

“This is the first plank of a new floor we are building under the gig economy. The fact work is arranged through a website or app should not mean that all notions of decency and fairness are ignored. Airtasker to its credit has recognised this.”

Image: GM, Uber Australia & New Zealand, David Rohrsheim. Source: Sydney.org