Australia: The Uber driver model - rooster or duck - employee or independent contractor?

A key principle of Australian employment law is that issues of substance are given more recognition than issues of form. As Justice Gray famously stated "parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck".

In other words, a business cannot call a worker an independent contractor, and insist everyone else does too, if an employment relationship exists as a matter of substance. This has been a key issue throughout the history of Australian industrial law.

Uber, the quintessential 'digital disrupter', has recently burst onto the world stage. The relationship it has with its drivers, allegedly an 'independent contractor' arrangement, has caused significant debate. The Fair Work Ombudsman recently announced that they are investigating Uber, due to claims it has engaged in sham contracting. Part 3-1 of the Fair Work Act prevents employers from misrepresenting an employment relationship as an independent contracting arrangement.

An independent contractor is a person that is engaged under a legal contract to provide a service. A genuine independent contractor is self-employed, running its own business to providing service to others. Independent contractors can work for a variety of clients at one time and often negotiate their own fees and working terms and conditions. On the other hand, an employee is an individual worker employed by an employer with the terms of their employment governed by an employment contract. Under this agreement, the employee agrees to provide their services to the employer in exchange for a salary or wage. This distinction is often expressed as being the difference between a 'Contract for Services', and a 'Contract for Service'.

The official line from Uber is that its drivers are "driver partners" (or in other words self-employed independent contractors) who are their own boss and have the autonomy and flexibility to drive when it suits them. But, according to a group of Uber drivers called RideShare Drivers United, they should be classified as casual employees instead because they can't negotiate prices, can't grow their own business, can't refuse fares and don't issue their own invoices. So, who is right?

At the moment, it is unclear. Australia is yet to have a test case to clarify whether Uber drivers are employees or independent contractors. The current approach adopted in Australia to determine whether there is an employment relationship is the multiple indicia test which involves weighing up various characteristics of the employment relationship. Common factors considered when determining the employment relationship include:

  • Hours of work – An employee has their hours of work set by an employer whilst an independent contractor works their own hours, as long as their service is provided
  • Tools and equipment – An independent contractor commonly provides their own tools and equipment whereas an employee has tools and equipment provided by their employer.
  • Capacity to delegate – independent contractors are able to delegate the work to others, such as their own employees or a sub-contractor, whereas employees cannot.
  • Obligation to work – independent contractors are not usually subject to an ongoing obligation to accept work, whereas employees have no such flexibility.
  • Deduction of income tax – employers are required to deduct income tax from them employees but have no such obligation towards independent contractors.

A recent decision in the UK Employment Tribunal would seem to indicate that RideShare Drivers United may have a point. In the UK case, which has since been appealed and is due to be heard in September 2017, the tribunal held that Uber drivers are "workers" for the purposes of UK employment laws and not independent contractors as defined by Uber. The tribunal was quite scathing of Uber UK's argument that they helped their drivers grow their own business saying this was not supported by the facts, stating:
"The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our minds faintly ridiculous. Drivers do not and cannot negotiate with passengers... They are offered and accept trips strictly on Uber's terms."

The tribunal also pointed to other characteristics of the relationship, many of which RideShare Drivers United have raised, that indicate the drivers are employees such as their inability to solicit their own customers, or their inability to contract on terms and conditions other than those set by Uber. The situation in the United States is even more complicated, with a number of tribunals having found Uber drivers to be employees, rather than contractors. This has resulted in Uber agreeing to pay $100 million to its almost 400,000 drivers (an amount of approximately $250 per driver) in order to continue classifying them as independent contractors. Whilst neither the UK decision or the various decisions in the US are binding on Australian courts, they do provide an insight into the issues that a court will consider. Courts will look beyond the description of the relationship and will instead look at the reality of how the work is being performed. If you are left with something that quacks and has webbed feet but you are calling it a rooster, just remember that you are not fooling anyone.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.