Uber Drivers Ruled Employees: What the Supreme Court Decision Means for NZ Businesses
In February, we wrote about the Court of Appeal’s decision that four Uber drivers were employees, not independent contractors, after applying the “real nature” test under section 6 of the Employment Relations Act. (Previous Article)
That same group of drivers has now been back to Court for the final word – and New Zealand’s Supreme Court has confirmed the outcome.
On 20 November 2025, the Supreme Court dismissed Uber’s appeal and held that the four drivers at the center of the case were employees. In doing so, the Court found that the factors pointing to employee status outweighed those pointing away from it.
The Court highlighted several key points:
Uber, not the drivers, controls the key aspects of the work relationship – including access to riders, the fare structure and how issues on trips are resolved.
There is no separate contract between the rider and the driver before the trip; instead, Uber offers the trip, and the rider accepts that offer.
Riders reasonably see themselves as dealing with Uber, not entering a private contract with an individual driver.
The Court held that the level of control and integration meant the “independent contractor” label in the written agreements did not match the real nature of the relationship.
This decision also sits against a wider backdrop of proposed employment law reform, including a new “gateway test” to distinguish contractors and employees. The ruling has already been picked up by both business groups and unions as part of that debate.
In our previous article on the Uber litigation, we set out the “real nature” test and the factors courts look at:
The parties’ intentions
The degree of control
The worker’s independence
The economic reality of the arrangements
How integrated the worker is into the business (Previous Article)
This decision has clear implications for other businesses that use contractors, casuals, platform workers or “gig-style” models.
Some practical points for business owners:
Labels are not protection. Calling someone a “contractor” in an agreement does not prevent them being an employee in law.
Control and integration are key. The more you control when, where and how work is done – and the more the person looks like part of your core business – the stronger the argument that they are an employee.
Economic reality counts. If someone is financially dependent on your business, has no real ability to build their own client base, and carries little genuine business risk, the “contractor” label is likely to be vulnerable.
Flow-on costs can be significant. If a contractor is later found to be an employee, there can be exposure for holiday pay, leave entitlements, minimum wage compliance and potentially personal grievance claims.
The decision has wide implications including the application of minimum entitlements, which will prove difficult if drivers switch between platforms.
Independent contracting remains an important and legitimate model in New Zealand – particularly for specialist, project-based or business-to-business work. But this is a good time to:
Review any large or long-term contractor arrangements.
Check whether your contractors are genuinely in business on their own account – or effectively working as part of your internal team.
Consider whether you need to adjust your model, your documentation, or both.
Be cautious about “gig-style” arrangements that rely heavily on control through an app or platform.
If you are unsure whether a role should be structured as employment or contracting, or you’re concerned that current arrangements might not stack up under the “real nature” test, we recommend taking advice early rather than waiting for a challenge.
Finally, I use Uber a lot, last week an Uber driver told me he was very unhappy at the thought of being an employee. He made the point he could choose when he wanted to work and when he didn’t, he had no intention of being told when he could take a holiday. Interesting.
Sylvia