Factions in the Employment Court? A take on the new Uber decision - by Michael S

On 25 October 2022, in a case called E Tu Incorporated v Rasier Operations BV and others [2022] NZEmpC 192, Chief Judge Christina Inglis decided that Uber drivers are employees under New Zealand law.

The decision uses a lot of academic research as well as previous case law. It's given rise to a lot of comment about whether this is all good for the employees who won their case. An employer has to give an employee proper benefits, as set out by law, but can also exert more control over the employee and end the employment contract if they reasonably think the employee hasn't lived up to it.

Chief Judge Inglis mentions the case of Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 230. We commented on that earlier as well.

Chief Judge Inglis did not mention Leighton Associates by name but she seems to have taken some of our points on board.

In that earlier Uber case, Judge Joanna Holden held that Uber drivers were not employees. Chief Judge Inglis disagreed. She said that if the Employment Court is asked to say whether a contract is a contract of employment or not, its job is to look at it directly. The question is what the law is rather than which party should win procedurally.

"But when it is common ground that the relationship is governed by a comprehensive written contract and when all the truly relevant primary facts are common ground (as they are here), no question of onus arises. It is then the responsibility of the Court to reach an affirmative decision one way or the other on how the contract should be classified." (paragraph 21)

Chief Judge Inglis took the same approach to the Employment Court's duty to consider whether a contract was legal or not in the case of 8i Corporation v Marino [2017] NZEmpC 69. We have mentioned this case before as saying that a "record of settlement", or a settlement contract signed off by MBIE under section 149 of the Employment Relations Act 2000, cannot be enforced if it is illegal, despite the wording of section 149(3). If that case had been taken seriously, Geoffrey Brown could not have been ordered to keep quiet about corruption in the Tauranga City Council and so could never have been bankrupted and sent to prison (by Chief Judge Inglis and Judge Bruce Corkill respectively).

What the 8i Corporation did let pass was the question of whether a contract that wasn't an employment contract could be dealt with in the Employment Court at all. Since she wasn't enforcing it, perhaps Judge Inglis felt that didn't matter. But we wonder how she didn't notice herself enforcing an illegal, non-employment contract so as to destroy the livelihood of whistleblower Geoffrey Brown.

One of the biggest supporters of enforcing illegal contracts was Joanna Holden. As a lawyer at Crown Law, she represented WorkSafe in supporting the agreement to drop the prosecution of Peter Whittall by using insurance money to pay the company's preferential debts to its former employees' families. Judge Joanna Holden took the decision that Chief Judge Inglis has just disagreed with.

New Zealand previously shared with Australia the position that Uber drivers were not employees. It currently still shares with Australia the idea that companies can contract out of laws they don't like - such as the law against corruption in City Councils or the law against money laundering. Tauranga City Council was able to use the Employment Court against Geoffrey Brown because Judge Bruce Corkill said that MBIE could make illegal contracts enforceable by signing them off, but since then the idea of enforcing contracts making evidence of criminal activity "confidential" has spread to the generic confidentiality clauses in employment contracts. Employers can now use confidentiality law and the courts to retaliate against whistleblowers.

We look at the public outrage about the results of allowing employers to contract out of criminal laws and hide behind "confidentiality wonder whether Judge Inglis' open disagreement with Judge Holden on the relevance of settled contract law principles means a turnaround for the Employment Court. Is the Employment Court now in favour of the rule of law? Time will tell.