Supreme Court parks Uber’s contractor model

Tuesday 18 November, 2025

On 17 November 2025, the Supreme Court of New Zealand handed down its keenly awaited decision in Rasier Operations BV v E Tū Inc. The Court dismissed Uber’s final appeal and confirmed that four representative Uber drivers were employees, not independent contractors, whenever they were logged on to the Uber app.

How the court reached its conclusion

The legal test

Section 6 Employment Relations Act 2000 (‘ERA’) defines an employee as a person employed “to do any work for hire or reward under a contract of service”. The key test for identifying an employment relationship is determining the “real nature of the relationship” by considering all relevant circumstances. The intention of the parties and contractual statements are relevant, but not decisive of the nature of the relationship. 

Contractual “window dressing” rejected

Uber’s standard form documents stated that drivers were “independent providers” and that Uber was merely a digital platform offering “lead-generation services”. The Supreme Court agreed with the Court of Appeal, that these provisions, were “window-dressing”, and intended to disguise the true nature of the relationship. The provisions were designed to avoid employment obligations and carried no weight.

Control, integration and dependence

The Court found that Uber exercised close control over drivers’ work:

• Pricing – Fares set unilaterally by Uber’s algorithm and drivers could not raise prices.
• Performance management – Ratings system, automatic de-activations, sanctions for rejecting rides, mandatory training after complaints.
• Oversight – GPS monitoring, oversight of routes taken, surge allocation rules, and detailed behavioural policies.

Drivers were the “public face” of Uber’s core passenger transport business and had no capacity to build their own goodwill or customer base. Any flexibility (choosing when to log on/off) did not outweigh the economic dependence and subordination that existed while the app was on.

Upholding the lower courts’ findings, the Supreme Court declared that, whenever logged in, Uber drivers are employees. Uber was ordered to pay costs of NZ$50,000 plus disbursements.

Key take aways

• Labels are irrelevant – Describing someone as an “independent contractor” is no defence if day-to-day reality points to employment.
• Control can be digital – Using algorithms to allocate work and pricing are forms of managerial control.
• Integration counts – Where workers have no separate client base or brand, they are likely to be seen as part of the business’ operation.
• Bargaining power matters – Courts are alive to power imbalances and will disregard contractual terms that are unrealistic or imposed unilaterally. 

The message is clear, if a business exercises significant control over people who provide its core services, those people are at real risk of being classified as employees, no matter what the contract says.

Further legal developments to consider

The Employment Relations Amendment Bill now before the select committee would insert a “gateway test” into the ERA. If all the conditions below are met, a worker will be deemed a contractor and the courts’ scope to look behind the label will be greatly reduced.

A worker will pass the gateway test if:

• The parties have a written agreement stating the worker is an independent contractor.
• The worker is free to work for others.
• either:
  • the worker is not required to be available at set times or for minimum hours, or
  • the worker may subcontract the work;
• The contract is not terminated simply because the worker turns down work.
• The worker had a genuine chance to obtain independent legal advice before signing.

The Supreme Court’s emphasis on the power imbalance in the Uber decision indicates that the final point, whether the worker really had an opportunity to take independent advice is likely to become decisive.

The Select Committee report on these changes is expected to be delivered on 24 December 2025.

Businesses engaging contractors should review their operating models in light of the Supreme Court’s decision and the proposed gateway test.
 

If you have concerns about your arrangements, contact one of our experts below.