Netherlands: The ‘Modern Employment Relationship’ of Uber
The District Court of Amsterdam has ruled that a “modern employment relationship” exists between the Uber drivers and Uber. This means that the drivers are not self-employed workers, but employees. In addition, the Dutch Collective Labour Agreement (hereafter: CLA) for Taxi Transport was declared applicable to the employment relationship.
Taxi drivers who register with the Uberapp can offer their services via the Uber platform. The rides are offered on the basis of an algorithm, after which the Uber driver can accept, ignore or refuse these rides.
In essence, the dispute comes down to the question of whether the relationship between Uber and the drivers should be qualified as an employment contract. If so, it must then be assessed whether the CLA Taxi Transport applies.
The questions of qualification
The characteristics of an employment contract under the Dutch law are, in brief: i) work, ii) wages, and iii) authority (‘in the service of’). The court ruled as follows on the question whether the agreement between the drivers and Uber contains characteristics of an employment contract, or, for example, of a contract for services.
According to the Court, there is no doubt that the drivers perform ‘work’ for Uber. Through the Uberapp, they transport passengers for Uber and receive a percentage of the price. In addition, the work is done personally, because the drivers have to confirm to Uber with a ‘selfie’ that they personally perform the ride.
The price for the ride constitutes the remuneration for transporting the passenger (the driver’s work). The fact that the passenger pays the price to Uber Pay, and that Uber Pay pays a part of it to the drivers, does not make this different.
III. Authoritative relationship: ‘modern employment relationship’
The authority criterion plays a key role in assessing whether there is an employment contract. Due to current technology, the criterion ‘authority’ has acquired a more indirect (often digital) controlling interpretation. The court ruled that the Uber drivers fall under the ‘modern employer authority’ of Uber:
- The drivers can only register with Uber through the Uberapp: the conditions under which they can use the Uberapp are non-negotiable for them. The drivers cannot refuse unilaterally changed conditions by Uber;
- The algorithm of the Uberapp determines how rides are distributed and what priorities are set. The drivers have no influence on the ride price;
- Through the Uberapp, drivers are given a rating, which can influence the access to the Uber platform and the offer of rides. The higher the rating, the more attractive the offered rides. Uber has an influence on the ratings that can be obtained by drivers and thus on the supply of rides. As a result, the entrepreneurial freedom of drivers is essentially absent;
- Drivers are allowed to cancel a ride they have already accepted, but after refusing three times, they are logged out and will not receive new rides until they have logged in again. The Uberapp therefore has both a financial and a disciplinary effect.
Uber drivers are employees; substance goes before appearance
The court came to the conclusion that Uber’s system leads to the fact that the actual performance has all the characteristics of an employment contract. The wording chosen in the contract, whereby the drivers are regarded as self-employed workers, does not correspond to the actual practice. This is in line with the old adage that applies in employment law, namely “substance prevails over appearance”. Therefore, the Court of Amsterdam qualified the agreements between Uber and the drivers as an employment agreement.
Application of the Collective Labour Agreement for Taxi Transport
According to the court, the consequence is that Uber falls within the scope of application of the (generally binding) CLA Taxi Transport. Because of this, Uber is legally obliged to comply with the provisions of the CLA Taxi Transport with regard to the drivers who have associated themselves with Uber in person. This means that Uber must refund wages to those drivers. In addition, it follows from this legal obligation that Uber must comply with the CLA even if the drivers do not want to. After all, a conviction that is ‘purely dependent on the will’ of the employee could amount to an escape that puts pressure on the effectiveness of the system of declaring a CLA generally binding.
Uber has already announced that it will appeal against the judgment of the District Court of Amsterdam.