Brazil: The 4th Lower Labour Court of São Paulo/SP Grants a Decision Recognising that Uber Drivers are Employees
On 14 September 2023, the 4th Lower Labour Court of São Paulo/SP rendered a decision in the civil class action No. 1001379-33.2021.5.02.0004 filed by the Ministry of Labour Prosecution against Uber to Brazil ruling that the drivers are Uber employees.
In accordance with the decision, all four (4) elements of an employment relationship (i.e., services are rendered on a (i) personal and (ii) habitual basis, (iii) upon remuneration, and (iv) under subordination) are present in the relationship between Uber and the drivers. For subordination, the decision understands that there are several situations that characterise the structural subordination that Uber has on the drivers through technology: (i) grades given by customers to drivers, which implicates in the number of rides and remuneration that can be received by each driver, (ii) possibility of unilateral blocking of the driver due to misconduct, (iii) instructions granted to the drivers about how to use the app and do the rides, (iv) rewards given by Uber to the drivers when the drivers work in the days and hours instructed by Uber, among others.
The decision ruled in favor of the request of the Ministry of Labour Prosecution and established that Uber must hire all drivers as employees and pay all applicable labour and social security charges within 6 months, as well as the payment of collective moral damages of 1 billion Brazilian reais to be paid 90% to the FAT – Workers Support Fund and 10% to the associations of app drivers.
This decision is still a first-instance decision, and Uber has declared that it will file all relevant appeals against it.
It is important to mention that there is still no regulation in Brazil about this type of work, and in May 2023, the Federal Government established a group to discuss the matter.
Moreover, this decision is not in accordance with the current understanding of most of our Labour Courts, including Regional and Superior Labour Courts. Several other decisions were already rendered on individual labour claims about the matter, and most of them ruled for the inexistence of an employment relationship between Uber and drivers.
Key Action Points for Human Resources and In-House Counsel
- Follow up the discussion, which may affect other platform/gig workers.
