Is an Uber driver actually an employee of Uber, or just a subcontractor?  Recently it was decided in England that Uber drivers were not independent contractors but were in fact employees of Uber.  This decision was made by the Employment Appeal Tribunal, Uber has indicated that they will appeal but haven't yet decided whether to apply to leap frog the Court of Appeal and go straight to the Supreme Court, which is the highest court in England.  It could potentially be heard with an appeal involving courier firm CitySprint and Pimlico Plumbers, due to be heard next year.

 

What about in Australia?

This question of categorising “workers” occurs here in Australia also. The point is that if the “worker” is an employee then the employer has to pay them according to the normal industrial Awards and has to provide Workers Compensation cover for them . If they are Independent Contractors then the employer only has to pay them whatever amount has been agreed upon between the employer and the worker and the worker has to pay for their own accident insurance and is not entitled to the minimum wage or to overtime, etc. The Australian courts have said for instance that the cyclists who work as couriers are employees and that cleaners working for some supermarkets are not employees. If the worker is an employee then the employer has to pay payroll tax in regard to the worker and if the worker is injured they are entitled to sick pay and workers compensation cover.

 

 

Tax treatment of employees vs sub contractors

If you are running a business it is important that you understand the difference so that you are not hit with an unexpected tax or insurance bill.  Here is a table from the Australian Taxation Office setting out the difference for taxation purposes.