Uber Eats paid $400,000 to settle an ‘unfair dismissal claim’ worth, at best, about $15,000, after Full Federal Court judges said they were ‘very unimpressed’ with Uber’s approach. The Settlement was reached after the hearing and before the decision was handed down. The confidential settlement was revealed under ‘parliamentary privilege’.
See below for more details.
David Marin-Guzman, AFR’s Workplace Correspondent, posted an article entitled Uber paid ‘incredible’ amount to avoid landmark judgment, on 10 June 2021.
Uber paid ‘incredible’ amount to avoid landmark judgment
Uber paid a “life changing” $400,000 to a driver so she would drop a legal challenge that could have forced the company to overhaul its business model and pay its workforce minimum pay and conditions.
The Transport Workers Union used parliamentary privilege at a Senate inquiry on Thursday to reveal the confidential settlement the company’s on-demand delivery arm had made with terminated driver Amita Gupta (see related AFR article – well worth a read) shortly after three Federal Court judges made critical comments about its arguments at trial.
The settlement, some 26 times more than what Ms Gupta was likely to receive under the law, revealed how far the company would go to avoid paying minimum wages, the union said.
“The most telling feature of this settlement was the extent of the settlement,” TWU national secretary Michael Kaine told the inquiry.
“I think it’s very clear that UberEats wanted to ensure that there were no risks that its exploitative system would be overturned by the full court and they were willing to pay an incredible amount of money, a life-changing amount of money, to the Guptas to make sure that moment in time did not occur.”
Unlike other jurisdictions, such as the United Kingdom, Uber has been successful in showing its drivers are not employees but self-employed and a Fair Work Commission full bench ruling against Ms Gupta remains the highest authority on the matter.
In the Federal Court
However, the union appealed that ruling last year to a full court of the Federal Court. Mr Kaine told the Senate inquiry that during the appeal hearing in November the judges made comments showing they were “very unimpressed” with Uber’s approach. A couple of weeks later, and before the court could deliver its decision, Uber settled the case. It is understood UberEats entered the confidential settlement with Ms Gupta, not the TWU. A spokeswoman for UberEats declined to comment other than to say “this matter was resolved by mutual agreement”.
Mr Kaine said that under unfair dismissal laws Ms Gupta would have probably only received a maximum of $15,000 compensation for six months’ work.
He revealed the amount in response to questions from inquiry chairman Labor senator Tony Sheldon, who advised Mr Kaine that he was protected by parliamentary privilege in disclosing the settlement.
The company also tweaked its contracts with delivery riders in changes the union said were to deal with what might have been the effects of the case.
Previous ‘independent contractor’ treatment
“Both of the Fair Work Commission’s previous rulings in this case confirmed that delivery-partners using the Uber Eats platform are independent contractors, with the full bench of the Fair Work Commission finding that the characteristics of the Uber Eats business point ‘decisively away’ from a finding of employment,” she said.
She said the full bench decision was consistent with previous rulings from the Fair Work Commission and Fair Work Ombudsman that drivers using the Uber app are independent contractors.
“It also reflects what 87 per cent of delivery partners tell us – that they value the freedom and flexibility the Uber app provides.”