EMPLOYMENT LAW JACK RAINBOW
Rise of the gig economy Increasingly, workers are abandoning the traditional nine-to-five working week to venture out independently as contractors or freelancers. While going out to work for yourself is not a new phenomenon, it has significantly increased both in Aotearoa and around the world. Jack Rainbow, from Dundas Street Employment Lawyers, looks at the rise of the gig economy and where the line between a contractor ends and an employee begins.
Advantages versus disadvantages
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ome independent contractors opt to go out on their own because they desire a more flexible and autonomous working life, assisted by advancements in technology that allow them to work anywhere and at any time. Many independent contractors are highly sought-after subject experts skilled in their field, which allows them to negotiate higher pay, work flexible hours, and obtain a higher level of autonomy.
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HUMAN RESOURCES
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The trade-off for these individuals is that, as independent contractors, they do not receive the same legal protections and entitlements afforded to employees, such as annual holidays, sick leave or personal grievance procedures. For businesses, engaging independent contractors can provide the business with access to specialist skills or equipment, without employing someone on a permanent or full-time basis. The result can be a mutually beneficial commercial arrangement, negotiated between fairly positioned bargaining parties. With that said, the gig economy and independent contractor arrangements are also vulnerable to exploitation, where businesses engage workers as independent contractors to circumvent paying minimum statutory entitlements, notwithstanding that those workers are really employees. Such situations are particularly concerning where the workers have no real bargaining power and are in low-paid work.
Employee or contractor?
While a label on a written contract may help determine the intention of the parties, the only way to distinguish between an employee or a contractor is to determine the real nature of the working relationship.
Courier drivers versus Uber drivers
In Leota v Parcel Express Limited [2020] NZEmpC 61, the Employment Court analysed the distinction between an employment relationship and an independent contractor arrangement. Mr Leota was ostensibly engaged as a courier driver by Parcel Express in an independent contractor arrangement. Following the termination of his contract, Mr Leota asked the Employment Court to make a declaration that he was, in fact, an employee. Mr Leota was: • assigned set runs, within set boundaries. He was also directed where he had to be and when by the company, with no ability to change the days or hours he was required to work • required to attend company meetings, wear a company uniform, comply with reasonable directions of the company and act in the company’s best interests at all times • required to purchase his own van, but the van had to meet company specifications, display signwriting of the company name, and it had to hold insurance by an
