TIME TO RIDE

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW -

The ques­tion is whether Uber can, in re­la­tion to its driv­ers, be said to have a con­ven­tional cor­po­rate struc­ture that ren­ders the test use­ful. Given the ab­sence of any for­mal re­port­ing lines or man­age­rial hi­er­ar­chy in re­la­tion to driv­ers, an Uber driver does not, in this more mean­ing­ful sense, form a part of the cor­po­rate struc­ture of Uber. This is par­tic­u­larly the case given that the driver may exit or en­ter the pool of driv­ers who ren­der the ser­vice at will.

Are Uber driv­ers eco­nom­i­cally de­pen­dent on Uber? The Time sur­vey study found that only a “small per­cent­age” of home-shar­ing and ride app users de­rived 100% of their in­come from the app. For half of the re­spon­dents, the app only ac­counted for 20% of their in­come.

These sta­tis­tics might, how­ever, change for SA, as its econ­omy is vastly dif­fer­ent, and home-shar­ing apps are not preva­lent in the coun­try. Uber is used, at least abroad, as a means of sup­ple­men­tary in­come, and is rarely the main or sole source of in­come.

In this re­gard, Uber driv­ers func- tion much like tra­di­tional in­de­pen­dent con­trac­tors, who are en­ti­tled to take more lu­cra­tive work when it is of­fered.

Should Uber driv­ers re­ceive less than R205,433.30 per an­num, they will be pre­sumed to be em­ploy­ees should cer­tain fac­tors be present, such as that the driver works more than 40 hours per week or the driver is pro­vided with a car by Uber.

It will also have to be proven that Uber is not an elab­o­rate scheme to en­sure that labour laws do not ap­ply to its driv­ers. The judg­ment in Build­ing Bar­gain­ing Coun­cil (South­ern & East­ern Cape) v Mel­mons Cab­i­nets CC (2001) 22 ILJ 120 (LC) in­di­cated that in such cir­cum­stances, the per­son will be con­sid­ered an em­ployee.

From the above and par­tic­u­larly if the dom­i­nant im­pres­sion test is ap­plied, it seems that, on the face of it, Uber driv­ers will not be con­sid­ered em­ploy­ees in terms of South African law. Uber does not have enough con­trol over driv­ers and Uber driv­ers are, mostly, not solely eco­nom­i­cally de­pen­dent on Uber.

Uber driv­ers do not, in real terms, place their pro­duc­tive ca­pac­ity at the “beck and call” of Uber. If Uber driv­ers are not con­sid­ered to be em­ploy­ees, they will not re­ceive un­fair labour prac­tice and dis­missal pro­tec­tions, UIF and a num­ber of other statu­tory ben­e­fits and pro­tec­tions.

How­ever, those Uber driv­ers who are solely eco­nom­i­cally de­pen­dent on Uber for in­come may have a bet­ter chance of prov­ing that they are em­ploy­ees of Uber. Those driv­ers would then not only be eco­nom­i­cally de­pen­dent on Uber, but ar­guably would also form a more per­ma­nent part of the or­gan­i­sa­tion, meet­ing two of the three tests used in de­ter­min­ing whether some­one is an in­de­pen­dent con­trac­tor or an em­ployee.

It is ironic that, in a coun­try where the labour laws are of­ten crit­i­cised as be­ing dra­co­nian and off-putting to in­vestors, Uber driv­ers may be con­sid­ered in­de­pen­dent con­trac­tors, while the op­po­site view has been adopted in some states of a coun­try such as the US, which is tra­di­tion­ally renowned for the flex­i­bil­ity of its labour mar­kets and its lack of pro­tec­tion of in­di­vid­ual em­ployee rights. How­ever, it can­not be as­sumed with cer­tainty that there will never be a situation where some Uber driv­ers may be de­clared by a South African court or ar­bi­tra­tor to be em­ploy­ees.

The courts have de­vel­oped the def­i­ni­tion of em­ploy­ment with a bias to­wards the pro­tec­tion of em­ployee rights and they may be in­clined to do so again. The adop­tion of the prin­ci­ple is such that even an il­le­gally em­ployed in­di­vid­ual is de­serv­ing of em­ploy­ment rights, as il­lus­trated in Kylie v CCMA (2010) 31 ILJ 1600 (LAC), which high­lights the bias that arises from the fact that the right to fair labour prac­tices is con­sti­tu­tion­ally en­shrined.

Each case will have to be de­ter­mined on its mer­its, re­sult­ing in a situation where some Uber driv­ers may be con­sid­ered em­ploy­ees and oth­ers in­de­pen­dent con­trac­tors.

Uber does not pre­scribe to its driv­ers where or when to work. Uber driv­ers have the free­dom to work where and when they want

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