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[2018] ZALCCT 1
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Uber South Africa Technology Services (Pty) Ltd v National Union of Public Service and Allied Workers (NUPSAW) and Others (C449/17) [2018] ZALCCT 1; [2018] 4 BLLR 399 (LC); (2018) 39 ILJ 903 (LC) (12 January 2018)
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Reportable
Case
no: C 449/17
In
the matter between:
UBER
SOUTH AFRICA TECHNOLOGY
SERVICES
(PTY)
LTD
Applicant
and
NATIONAL
UNION OF PUBLIC SERVICE
AND
ALLIED WORKERS
(NUPSAW)
First Respondent
SOUTH
AFRICAN TRANSPORT AND
ALLIED
WORKERS UNION (SATAWU)
Second Respondent
TSHEPO
MOREKURE
Third Respondent
DERICK
ONGANSIE
Fourth Respondent
LEE
STETSON CARL DE
OLIVEIRA
Fifth Respondent
JOSEPH
MUNZVENGA
Sixth Respondent
FELICIEN
NZISABIRA
Seventh Respondent
DEUCE
NDAYAJEHWHO
Eighth Respondent
GUYLANI
ALOMYI
Ninth Respondent
KHOTSO
MOREKURE
Tenth Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
Eleventh Respondent
WINNIE
EVERETT
N.O
Twelfth Respondent
Date
of application: 13 December 2017
Date
of judgment: 12 January 2018
Summary:
Review of jurisdictional ruling by CCMA commissioner that referring
parties in unfair dismissal dispute were 'employees'
for the purposes
of s 213 of the Labour Relations Act. Ruling made against entity
'Uber SA' in circumstances where commissioner
had earlier refused to
join international company 'Uber BV' to the proceedings. Commissioner
nonetheless finding, on the basis
of a 'realities of the relationship
test' that referring parties were employees of Uber SA. Test
inconsistent with prevailing authorities.
No viva voce evidence led
at hearing- by agreement, jurisdictional point decided
on affidavit. On
review, held that the
referring parties had failed to discharge the onus to establish that
they were employees
of Uber SA. The commissioner, having refused to
join Uber BV, proceeded to make a ruling on a basis that conflated
Uber SA and
Uber BV. The facts before the commissioner disclosed that
Uber SA did no more than provide administrative and marketing support
to Uber BV. The commissioner's decision was incorrect and is thus
reviewable. Question whether the referring parties were employees
of
Uber BV left open.
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
Uber BV, a company incorporated in the Netherlands, owns and operates
a smart phone application (the Uber App), the tool through
which it
conducts business on six continents, in approximately 70 countries
and almost 500 cities. The Uber App mediates demand
between two user
groups - the first being drivers and the second persons seeking
transportation, referred to as 'riders'. On average,
more than 5
million trips take place through the Uber App every day.
[2]
The nature of the engagement of drivers who use the Uber App (and
indeed the many others who provide services in what has been
described as the 'gig economy'),[1] poses a challenge to
traditional conceptions of employment world
wide, and has tested the boundaries of the protection extended to
working people by domestic labour legislation.[2]
[3]
This is an application to review and set aside a ruling issued by the
twelfth respondent (the commissioner) on 7 July 2017,
when she ruled
that the third to ninth respondents (the drivers) were employees as
defined in s 213 of the Labour Relations Act,
66 of 1995 (LRA), and
that they were employed by the applicant (Uber SA). The effect of
that preliminary ruling is that the eleventh
respondent, the
Commission for Conciliation, Mediation and Arbitration (CCMA), has
jurisdiction to arbitrate claims of unfair dismissal
referred by the
drivers after they were 'deactivated', or denied access to the Uber
App. The facts that gave rise to the drivers'
deactivation are not
material for present purposes, nor is the question whether
deactivation constitutes a 'dismissal' for the
purposes of the LRA
The sole issue that the commissioner was required to determine is
whether the drivers were employees of Uber
SA
[4]
The CCMA and the commissioner do not oppose this application.
[5]
The identity of the drivers' employer assumed some significance in
the CCMA hearing. Two legally separate entities emerged as
possible
candidates during the course of referral and conciliation processes
in the CCMA - Uber SA and Uber BV. Ultimately, after
the commissioner
dismissed an application by the drivers to join Uber BV, the only
employer party to the arbitration proceedings
was Uber SA
[6]
The limited question that the commissioner had to answer therefore
was whether the drivers were employees of Uber SA at the
time that
they were refused access to the Uber App or 'deactivated'. Given the
nature of the test that applies in review proceedings
where a
jurisdictional ruling is in issue, this court must decide whether the
commissioner's decision was correct.
Interlocutory
issues
[7]
There are two interlocutory issues to be considered. The first is an
application to strike out paragraphs 20 and 21 of the drivers'
answering affidavit and annexure OP3 to the affidavit. The annexure
is a study compiled by graduate students at the University
of Oxford.
The nature of the document and the purpose for which it is sought to
be admitted as evidence is explained by the deponent
in paragraphs 20
and 21:
20.
I attach, marked "OP3", a comparative
report on The
Employment Status of Uber Drivers, prepared by scholars and
researchers at Oxford University, for The Social Law
Project of the
University of the Western Cape. I am advised that the research was
carried out in response to a request by our legal
team, members of
which met Prof Sandra Friedman at the 2017 SASLAW conference held at
Sun City in September.
21.
OP3 shows that the legal issues and relationships
are by no means
obvious, as the applicant seeks to suggest. Faced with the question
of the employment status of Uber Drivers, courts
and tribunals in
most Jurisdictions courts (sic) examine the realities of the way in
which the work is done; the manner in which
Uber seeks to formally
define or to portray their relationship with partners and drivers is
of little significance. Uber, naturally,
endeavours to avoid
regulation by employment (and other) law, while those who drive for
Uber seek protection under employment law.
[8]
Writings by legal scholars may well be recognised as valid secondary
sources of authority which may have persuasive effect[3]
but they do
not ordinarily constitute evidence. As Joffe J said in Swissborough
Diamond Mines v Government of the RSA
1999 (2) SA 279
(TPD), in
motion proceedings, an applicant must raise the issues by defining
them, and set out the evidence on which it relies.
The applicant must
set out the facts simply, clearly, in chronological sequence and
without argumentative matter. In particular,
it is not open to the
applicant (or a respondent for that matter) merely to annex
documentation to its affidavit and request the
court to have regard
to it. What is required is that the portions of the documentation on
which reliance is placed are identified,
with an indication of the
case which is sought to be made out (at 323-324).
[9]
The drivers do not rely on annexure OP3 to advance any factually
based contentions, nor have they identified any of the portions
of
the memorandum on which they specifically rely or in respect of which
they seek to make out their case. To the extent that the
content of
the annexure is proffered as evidence that the legal regulation of
work in other jurisdictions is complex and that courts
elsewhere
concern themselves with the realities of the manner in which work is
performed, the South African courts have acknowledged
that the
relationships through which work is performed or services rendered
are complex, and have developed criteria to determine
whether a
person is an 'employee' for the purposes of the LRA. The test to be
applied acknowledges the significance of the realities
of the
relationship as opposed to the terms of any formal agreement between
the parties or any label that they seek to attach to
it.[4] The
memorandum attached as OP3 may well have some relevance for the
purposes of argument, and indeed, may well constitute
a valuable
source of reference, as comparative legal studies often do. But it
has no place in the pleadings and has served only
to burden the
already voluminous papers before the court.
[10]
Paragraphs 20 and 21 of the answering affidavit and annexure OP3 to
the answering affidavit accordingly stand to be struck
out.
[11]
The second interlocutory issue is relates to an application to join
Uber BV as a party to these proceedings. The application
does not
advance any specific grounds on which joinder is sought, other than
to assert that Uber SA has a substantial interest
in the matter. As
mentioned above, a similar application was brought in the course of
the proceedings before her. The commissioner
dismissed the
application in the following terms:
4)
This matter was previously set down for hearing on three occasions
and each time a ruling was issued. At the last hearing on
15 March
2017, the respondents applied for joinder of the holding company Uber
BV, based in the Netherlands, as second respondent
in the unfair
dismissal cases. I refused joinder on the basis of the Constitutional
Court decision of NUMSA v lntervalve (Pty)
Ltd and others
[2015] 3
BLLR 205
(CC) in which it was held that employers not cited in the
referral to conciliation cannot be joined in the Labour Court
proceedings
and referral to conciliation of an unfair dismissal
dispute is an absolute pre-condition for adjudication. Due to the
decision
in lntervalve and despite CCMA Rule 26, it was not possible
to join Uber BV as a second alleged employer at this stage of the
proceedings.
I also took into account the jurisdictional challenges
of a respondent based in the Netherlands.
[12]
The reference to the lntervalve judgment is to the judgment of the
majority of the Constitutional Court, who referred with
approval to
the judgment of the Labour Appeal Court in NUMSA v Driveline
Technologies (Pty) Ltd and another
2000 (4) SA 645
(LAC). The
Constitutional Court said the following:
The
reasoning of the Driveline majority is, in my view, convincing.
Section 191 (5) stipulates one of two preconditions before the
dispute can be referred to the Labour Court for adjudication: there
must be a certificate of non-resolution, or 30 days must have
passed.
If neither condition is fulfilled, the statute provides no avenue
through which the employee may bring the dispute to the
Labour Court
for adjudication. As Zondo J shows in his judgment, with which I
concur, this requirement has been deeply rooted in
South African
labour law history for nearly a century. We should not tamper with it
now...
Referral
for conciliation is indispensable. It is a precondition to the Labour
Court's jurisdiction over unfair dismissal disputes.
NUMSA,
therefore, had to refer the dispute between the employees and
lntervalve and BHR for conciliation...[5]
[13]
The court went on to find that the referral in that case 'did not
embrace lntervalve and BHR' and that the alleged employers'
exclusion
from the conciliation process was accordingly fatal to the union's
attempt to join them as parties to proceedings that
the union had
instituted in this court.
[14]
In the present instance, the commissioner had before her a number of
separate referrals, all consolidated in terms of rulings
that she
issued on 9 November 2016 and 23 December 2016 respectively, or by
agreement. It is not disputed that when the referrals
were made to
the CCMA, the employer party was cited as 'Uber'. That is not
surprising, since that was no doubt how the drivers
identified their
employer. Uber BV assumed that the referral had been made as against
it, since it regarded itself as the corporate
entity against whom the
drivers would have any claim, if they had a claim at all.
What subsequently transpired
is not entirely clear.
What is apparent from the papers is that at some stage, the CCMA
amended the citation to read 'Uber
SA Technology (Pty) Ltd' as the
employer, and all of the documentation that followed reflected this
amendment.[6]
[15]
Despite whatever initial confusion may have existed, it was
ultimately accepted by all concerned (including the drivers, their
union representatives and the commissioner) that the only alleged
employer party to the dispute was Uber SA. That is no doubt why
the
first respondent (NUPSAW), when it later became involved in the
dispute, sought in March 2017 to join Uber BV to the proceedings.
[16]
The respondents' counsel acknowledged that in these proceedings, no
cross review had been filed against the commissioner's
refusa,
to join Uber BV. I was advised during argument that a cross-review
had apparently been filed on 3 November 2017, under
a different case
number. That does not assist the drivers at this late stage. The fact
remains that the commissioner's ruling dismissing
the application to
join Uber BV remains in force until is reviewed and set aside.
[17]
To the extent that the application to join Uber BV was motivated by
the remedy sought by the drivers in these proceedings (that
if the
commissioner's ruling is reviewed and set aside the matter ought
appropriately to be remitted to the CCMA with directives,
to include
the joinder of Uber BV), I deal with this below.
[18]
The application to Jorn Uber BV to these proceedings accordingly
stands to be dismissed.
The
evidence before the commissioner
[19]
Despite what appears to have been an intention to lead viva voce
evidence, the parties to the proceedings under review agreed
ultimately that the issue of the CCMA's jurisdiction should be
decided on affidavit. The commissioner had before her the founding
affidavit filed by Uber SA in the matter between it and the
third respondent in these proceedings, Morekure, prior
to the
consolidation of the various disputes that had been referred to the
CCMA. After consolidation, the answering affidavit was
deposed to by
Morekure, and relates specifically to his experience and that of the
sixth respondent, Muzvenga. Morekure says very
little about the other
drivers, but records that the fourth to ninth respondents agreed that
he should depose to the affidavit
on behalf of all of the drivers.
Uber SA filed a lengthy replying affidavit and with the benefit of
heads of argument, these were
the papers that served before the
commissioner and the basis on which she made her ruling.
[20]
In essence, Uber SA denied that there was any contractual
relationship between it and the drivers, and averred that any
relevant
contractual relationship existed as between the drivers and
Uber BV, which was not a party to the dispute. Uber SA further
asserted
that the drivers were in any event independent contractors
and not employees vis-a-vis Uber BV.[7]
[21]
Given that the existence of any employment relationship between the
drivers and Uber BV was specifically not an issue that
the
commissioner was required to decide, no more need be said for present
purposes about Uber SA's averments that relate to the
employment
status or otherwise of the drivers in relation to Uber BV and in
particular, the contention that the drivers were independent
contractors of Uber BV. However, certain of the contracts between
Uber SA and Uber BV and between Uber BV and the drivers and their
partners are relevant to a determination of the nature of the
relationship between Uber SA and the drivers, and I shall refer to
them as necessary.
[22]
It is not in dispute (and the commissioner records as much) that the
Uber business model recognises three categories of relationship.
The
first is that of a partner driver. This refers to a
vehicle-owning partner of Uber BV. A partner-driver is someone who
owns one or more vehicles, which have been registered under his or
her profile with Uber BV on the Uber App, and is also registered
with
Uber BV in his or her own right as a driver authorised to make use of
the Uber App. A partner driver pays a fee to Uber BV
for its
services. Uber BV deducts that fee from the fare that it collects
from the rider, and pays the balance to the partner.
[23]
The second category is the driver only. This is a person who does not
own a vehicle that is registered with Uber BV, but who
drives on the
Uber BV profile of one of Uber BV's partners, in agreement with that
partner. The driver must register as a driver
with Uber BV, and agree
to be bound by its standard contracts. Once the relevant requirements
have been met, the driver is registered
and activated. The driver
pays no fee to Uber BV, and receives no payment from Uber BV. The
driver's remuneration is received from
the partner concerned, in
accordance with whatever terms the driver and partner may have
agreed.
[24]
The third category is that of partner only. This is a person who owns
one or more vehicles registered with Uber BV on the Uber
App but who
does not drive a vehicle. Partners contract with drivers in the
'driver only' category on terms agreed between them.
[25]
The parties are agreed that the present dispute concerns only
partner-drivers and drivers.
[26]
In the founding affidavit, Uber SA sets out in some detail the nature
of the business of Uber BV. Uber BV does not own or operate
any
vehicles in South Africa; it is a technology company that connects
independent transport operators with riders via the Uber
App. Uber BV
licenses the Uber App, which enables riders to request transportation
services which are then accepted and provided
by what are referred to
as independent transport operators. Through the Uber App, drivers are
able to provide transportation services
in their capacity as
independent transport operators, with the ability to establish,
develop and expand their own businesses in
accordance with their
needs, time schedules and individual business skills and plans.[8]
[27]
The relationship between Uber BV and Uber SA is described in some
detail, and in particular, the relevant contractual
arrangements between them. The relationship between the two entities
is governed by a written intercompany service agreement which
records, amongst other things, that Uber BV and not Uber SA is the
entity that provides lead generation services on an intermediary,
fee
paying basis to partners/drivers who provide on-demand transport
services, whereby partners/drivers are able to receive and
accept
requests for transportation made by riders. Uber BV is the
contracting party to all of the agreements relating to the provision
of intermediary services and the use of the Uber App with the
partners/drivers and the users within South Africa. In terms of the
agreement, Uber SA provides specified support services to Uber BV,
for which Uber SA is compensated. These support services are
defined
in the agreement but in effect, amount to marketing and support
services to be provided by Uber SA for and on behalf of
Uber BV. Uber
SA is specifically not entitled to negotiate or enter into any
agreements for and on behalf of Uber BV, and does
not have the power
authority to conclude any contracts with partners/drivers. It is not
disputed that there is no contractual relationship
of any nature
between Uber SA one the one hand, and Uber BV's partners and/or
drivers in South Africa on the other. Uber BV contracts
directly with
the partners/drivers and is the entity that decides to deactivate any
driver from use of the Uber App.
[28]
Uber SA provides a brief overview of what is described as the
'on-boarding' process. That process requires a driver to
create a
profile by registering a username and password on the uber.com
website, which is hosted by Uber BV. In the course of setting
up a
profile, the driver must agree to a driver privacy statement and
afterward receives an email from Uber BV requesting him or
her to
upload a valid South African driving licence and professional drivers
permit on the website, under his driver profile. Once
this
documentation has been verified, the driver receives an email
informing of the next steps. All of these emails are generated
by
Uber BV. The driver then attends a driver competency test conducted
by a third-party service provider, a requirement that was
not in
place at the time when Morekure completed his on-boarding process.
Afterward, the driver attends a screening and background
check,
conducted by third party. In essence, this involves a prior criminal
record check.
[29]
The driver is then invited to attend an information session, a
two-hour session that takes place at the offices of Uber SA
in Green
Point, Cape Town. During that session, drivers are provided with
information on how to use the Uber App, including login
requirements,
navigation via Google maps, how to accept or cancel a request, and
how to go online and off-line. In addition to
this information, Uber
BV provides suggestions and best practices on, amongst other things,
how to maintain good ratings from riders.
These are not mandatory,
but rather are aimed at helping a driver improve his or her business.
The driver's profile is then activated,
pending approval of the
applicable terms and conditions associated with use of the Uber App.
[30]
A driver will not be 'activated' or permitted by Uber BV to make use
of the Uber App unless he or she has agreed, during the
on-boarding
process, to be bound by Uber BV's standard terms and conditions
contained, inter alia, in its services agreement and
driver addendum.
Again, because Uber BV was not a party to the proceedings under
review and is not a party to these proceedings,
it is not necessary
to canvass the terms of these agreements in any detail. For present
purposes, it is sufficient to record that
the material terms of the
agreement provide that the provision of transportation services by
partners and/or drivers creates a
legal and direct business
relationship between the partner-drivers and drivers concerned and
the rider; Uber BV is not a party
to this relationship. The provision
of the Uber App and the Uber services to the partner creates a legal
business relationship
between the partner and Uber BV. Uber BV does
not control or direct the drivers in their performances under the
services agreement
- the drivers retain the sole right to determine
when and for how long they will use the Uber App. The parties to the
agreement
specifically agree that the relationship between them is
solely that of a principal and independent contractor. They
specifically
agree that the services agreement is not an employment
agreement, nor does it create an employment relationship
between
Uber BV and the driver,
and that no joint venture, partnership, or agency
relationship
exists between Uber BV and any driver.
[31]
The addendum to the agreement recalls specifically that the driver
maintains a contractual employment relationship with an
independent
company in the business of providing transportation services (i.e.
the partner) and that Uber BV does not direct or
control the driver
generally, the driver's performance of transportation services or the
maintenance of any vehicles. The driver
specifically acknowledges
that Uber BV does not control, or purport to control when or for how
long the driver will utilise the
Uber App or Uber services, or the
drivers decision, v1a the Uber App, to accept, decline or ignore a
request for transportation
services.
[32]
Once a driver has been on-boarded, the driver is solely responsible
for generating his or her own income and controls his or
her own
expenses. Uber BV does not guarantee drivers any minimum number of
riders, and it has no control over whether riders utilise
the
services of drivers via the Uber App on any given day or at any given
location. In short, drivers assume the economic risk
of whether
riders will log on and require transportation via the Uber App, in
circumstances where the drivers retain the unfettered
right to
provide transportation services or obtain passenger generation leads
through means other than the Uber App.
[33]
The fee attributable to Uber BV is electronically calculated per
trip, as a percentage of the fee charged by the partner to
the rider.
Once Uber BV's service fee has been deducted, the partner
electronically receives the aggregate revenues earned over
the course
of the week, via an electronic direct deposit into his or her bank
account. Funds collected from a rider's credit card
in South Africa
are transferred into a South African bank account operated by Uber BV
from which the balance of the fee owing to
the partner is transferred
directly to the partner's nominated bank account. None of this is
disputed by the drivers.
[34]
Uber SA submits that given the factual matrix described, there is no
contractual relationship of any nature, much less a contract
of
employment, between Uber SA and the drivers, and that the parties to
any contractual relationship relevant in the dispute are
the drivers
and Uber BV, which is not a party to the dispute. Further, Uber SA
submits that the CCMA would in any event not have
jurisdiction to
entertain a dispute between Uber BV and the drivers, because the
drivers are independent contractors to Uber BV
and not its employees.
[35]
More than half the answering affidavit comprises a series of what are
referred to as 'background facts', the balance being
an answer in
more specific terms to the averments made in the founding affidavit.
In broad terms, the drivers submit that in reality,
Uber SA was their
employer and the drivers its employees, and that Uber SA, acting as
the local entity through which Uber BV does
business in South Africa,
interacts, manages and contracts with them, for example, by
reactivating drivers after negotiation, authorising
disbursements for
cleaning, providing income guarantees, setting rules for airport
queues, negotiating incentive bonuses and 'locking
out' protesters.
[36]
Despite the distinction drawn between Uber SA and Uber BV in the
introduction to the answering affidavit, the drivers continue
to
refer to 'Uber'. The deponent Morekure describes how he came to
relocate to Cape Town after approaching Uber's offices in
Johannesburg
and being informed that there were no positions
available in Johannesburg but that he should apply in Cape Town. He
states that
he attended a presentation at Uber's headquarters in
Green Point and that he was required to attend 'several training
sessions'.
At these training sessions, he was taught how to behave
toward riders in order to promote the Uber brand, and shown how to
use
the Uber App. He was also informed that this training was
compulsory. He was screened and his vehicle was inspected. Morekure
states
that he was then registered online with Uber, when he was
required to upload certain documents. After the screening and
training,
he was 'activated' as a driver, and issued with a username
and password allowing him to log onto the Uber App.
[37]
The drivers aver that Uber had many rules, some of which were
explained during training and others communicated later, from
time to
time. They record that Uber 'controls when and where we work by
limiting the maximum number of Uber drivers in a particular
zone'
and went on to give the example of the airport zone, where demand was
high and where Uber in its sole discretion decided
which drivers were
permitted to queue there.
[38]
In relation to performance management, the drivers aver that 'Uber
monitors us closely' and subjects drivers to comprehensive
performance management. This is accomplished through a rating of the
drivers by riders and a requirement that drivers maintain
a minimum
rating.
[39]
The drivers state that there is no provision for meal breaks, comfort
breaks or any driver discretion to refuse to drive to
an unsafe area.
In particular, it is averred that Uber regards cancellation and
acceptance rates as measures of performance and
deactivates drivers
who cancel or decline requests too often.
[40]
The next heading in the general section under which the drivers make
a case to the effect that drivers are employees of 'Uber'
is that
which denies that drivers are independent operators of their own
businesses. The drivers record that when a rider requests
a ride,
Uber assigns a driver to the rider based on the proximity of the
driver to the rider. In other words, drivers cannot independently
source riders
-
they have information only regarding the rider's name and requested
pickup location. Further, drivers have no control over pricing
-
fares are unilaterally set by 'Uber' as is the portion of the ride is
fair that it pays as 'commission'.
[41]
The drivers acknowledge that while they are in theory free to work
flexible hours, in practice, they are forced to work long
hours in
order to have the income that they need to meet their financial
commitments. Morekure states that out of his earnings,
he was
required to pay for the car, insurance and maintenance, petrol, and
air time necessary to use the Uber App. He earned on
average R7000
per month after covering his expenses. Drivers who are insufficiently
active on the Uber App are 'archived'.
[42]
In regard to the source of control, the drivers submit that they are
controlled and managed partly by the Uber App itself,
and partly by
'Uber' management operating out of the Green Point office.
[43]
In relation to the risk of loss and damage, the drivers aver that
this is borne by Uber, and that Uber guarantees the fare
to the
driver and also reimburses the costs of cleaning and repair if a
rider damages or dirties a vehicle.
[44]
Under the heading 'Uber is my employer' the drivers state that they
regard 'Uber' as their employer and that in their understanding,
Uber
BV is the founding parent company and that Uber SA 'is its local
presence in South Africa'. This of course is not relevant
in what is
necessarily an objective enquiry, but In support of their contention,
and central to their claim, they say the following:
All
of us who drive for Uber in Cape Town were recruited and trained in
Cape Town, and our work is performed in Cape Town. When
we have
problems or issues, we discuss them with Uber employees based at
Uber's offices (now at the Airport, but formerly at Green
Point, Cape
Town). We correspond by email with Uber management in Cape Town, and
emails sent to us come from various addresses
belonging to Uber SA.
There is also an international portal which sends automated emails
(help@uber.com). We are paid in South
African rands from a South
African bank account, into our South African bank accounts. When we
are dismissed, we are dismissed
in Cape Town, and it is with Cape
Town based Uber management that we can negotiate in the event that we
want to be reactivated.
As drivers, we do not distinguish between
Uber SA and Uber BV.
[45]
In its replying affidavit, Uber SA denies that it employed Morekure
as a driver or in any other capacity. Uber SA also denies
that it
ever had any contractual relationship with Morekure, that he ever
rendered any services to it, received any remuneration
payments from
it, either directly or indirectly via the partner whose vehicle he
drove during the period that Uber BV permitted
him access to the Uber
App.
[46]
Uber SA contends that any contractual relationship relevant to the
dispute was between the drivers and Uber BV, which, without
creating
any employment relationship, permitted them to make use of the Uber
App to connect with and transport riders. Uber SA
contends that at
all relevant times, the drivers were (and remain) free to earn
revenue from transport services using any other
means available to
them - the Uber App was only one tool available to them as drivers.
[47]
Uber SA does not dispute that from time to time, it has limited
interactions with Uber BV's partners and their drivers, either
by
email or by personal interaction at its Cape Town support office.
Uber SA acknowledges that when drivers and/or partners are
on-boarding onto Uber BV's system, Uber SA may assist them to do so,
and that it also deals with routine administrative matters,
for
example, assisting partners will drivers to make changes to their
profiles on Uber BV's system. Uber SA also deals on behalf
of Uber BV
with local administrative problems and sometimes takes up issues
raised by specific partners or drivers. For example,
Uber SA would
assist a driver to process a cleaning claim, although the actual
payment is made by Uber BV and recovered by Uber
BV from the rider.
Uber SA denies that these limited interactions in any manner, shape
or form render Uber SA the drivers' employer.
[48]
More specifically, Uber SA records that the presentation in Green
Point referred to by the deponent was no more than a 'partner
introduction' session, run on a weekly basis, for the benefit of
prospective partners and drivers. This is not compulsory, and
is for
information purposes only and in particular, intended to give
prospective drivers and partners an overview of the Uber App
and how
to use it to connect with riders. Uber SA disputed that Morekure was
required to attend 'several' training sessions and
averred that the
single, non-compulsory partner introduction session was all that was
provided. Uber SA also acknowledged that
in the past, its employees
would inspect new vehicles registered by partners on the Uber App,
but recorded that this function is
now performed by a third party and
is in any event limited to checking that the vehicle is the same
vehicle registered by the partner
on the Uber App.
[49]
Central to the replying affidavit is the averment that drivers are
entitled to move, and in fact frequently do move between
partners, on
terms and conditions negotiated with them and without reference to
either Uber BV or Uber SA. Further, neither Uber
BV nor Uber SA has
any interest in or say over the arrangements made between
vehicle-owning partners and drivers - this is strictly
a matter to be
regulated by agreement between them. Once agreement is reached
between the driver and a new partner, the driver
him or herself
effects the change on the Uber App. Provided that the new partner is
an existing partner of Uber BV, no further
consent is required,
either from Uber BV or Uber SA.
[50]
The drivers' own histories are recorded to illustrate the point. For
example, the fifth respondent, De Oliveira, was employed
by four
different vehicle owning partners in turn before eventually
registering with Uber BV as a vehicle-owning partner in his
own
right. In this capacity, he employed his brother as a driver under
his profile. The sixth respondent, Munzvenga, contracted
with four
different vehicle owning partners in turn before becoming a
vehicle-owning partner himself. The fourth respondent, Ongansie,
was
at the time of his deactivation as a driver, regarded by Uber BV is a
driver only, having transferred the vehicles previously
registered
under his own partner profile to his wife's partner profile. On his
own version before the CCMA, he and his wife were
operating a
transport business together. In addition to the fares he generated
from driving one of the vehicles, he and his wife
have three other
vehicles registered with Uber BV and in this capacity, have
contracted with multiple drivers to operate those
vehicles. The third
respondent, Morekure, was regarded by Uber BV as a driver only, but
on his own version, appears to be in a
de facto informal
vehicle-owning partnership with his brother. The ninth respondent,
Alomyi, contracted with five different vehicle-owning
partners and
after his deactivation by Uber BV, he registered as a vehicle-owning
partner in his own right and currently employs
a driver to operate
under his profile. The seventh and eighth respondents, Ndayajehwo and
Nzisabira respectively, contracted with
four and three different
vehicle-owning partners by whom they are remunerated in accordance
with the terms agreed between them.
None of these averments are
disputed.
[51]
Insofar as the drivers averred that it is impossible to use the Uber
App and drive for Uber without having been through the
on-boarding
process and that a driver must accordingly perform his or her work
personally, in reply, Uber SA contends that this
formulation is
misleading - if the driver is a partner he or she can get any other
driver approved by Uber BV to drive his or her
vehicle and use the
Uber App whenever he or she so chooses. If the driver is not a
partner, he or she is under no obligation to
perform any services for
Uber BV (or Uber SA for that matter) and may drive whenever and if
ever he or she chooses. As noted above,
the only limitation is that
no driver may use the Uber App if he or she is not, or does not,
remain registered with Uber BV as
an approved driver. Uber SA submits
that it is therefore incorrect to make the unqualified statement that
every driver who makes
use of the Uber App must perform his or her
work personally.
[52]
The assertion that Uber requires drivers to supply their own vehicles
is denied in reply. Uber SA contends that many drivers
who make use
of the Uber App do not own their own vehicles. In so far as Morekure
suggests that he entered into a lease with his
brother in terms of
which he would be the vehicle-owning partner of Uber BV, Uber SA
records that the arrangement was not disclosed
to Uber BV (or Uber
SA) but that on face value, in substance, Morekure was in the same
position as a vehicle-owning partner, and
used his brother's access
to finance to accomplish this. As such, he had the ability (as did De
Oliveira, Munzvenga and for a time,
Ongansie) to employ one or more
drivers to operate the vehicle registered under person's profile.
Uber SA submits that this is
entirely irreconcilable with his alleged
status as an 'employee' of Uber SA.
[53]
Uber SA specifically denies the averment that 'Uber' required
Morekure to submit an application to the City of Cape Town for
an
operating licence. Uber SA avers that the city requires
vehicle-owning partners who make use of the Uber App to hold an
operating
licence, as it does in respect of all passenger
transportation service providers. In Morekure's case, the registered
vehicle owner
was his brother, Khotso, the 10th respondent. In the
answering affidavit, Morekure states that he submitted a business
plan to
the city on behalf of his brother, the owner of the vehicle
and the party who needed to licence the vehicle. Morekure's assertion
that Uber required him to submit application forms together with a
standardised Uber business plan to obtain an operating licence
is
therefore false.
[54]
Insofar as payments are concerned, Uber SA notes that it is not in
dispute that Uber SA does not remit any payments of any
nature to any
of the drivers and avers that in so far as Uber BV's involvement in
remitting payments to partners is concerned,
payment of fares
is made to the partner concerned (and not to the
driver), the payment arrangement between
a partner and a driver being
a matter for agreement between them. In terms of the relevant
agreement applicable to all registered
riders in South Africa, Uber
BV deducts the fare amount from the rider's credit card and acting as
a collection agent on behalf
of the vehicle-owning partner, pays over
the fare subject only to the deduction of the service fee which the
partner pays to Uber
BV in consideration for the technology and fare
collection services which it provides.
[55]
Uber SA asserts that the deactivation of all of the drivers
was effected by Uber BV and that no-one in Uber SA was party
to this
decision or had any knowledge of it prior to the deactivation being
brought to its attention by the drivers. The documentary
evidence
attached to the replying affidavit makes clear that the email
correspondence advising of deactivation is addressed to
the driver
concerned by Uber BV.
[56]
In the light of the various agreements entered into between the
drivers and Uber BV, the contractual arrangements as between
Uber BV
and Uber SA, and the facts disclosed in relation to the
implementation of those agreements, Uber SA submits that the drivers
are not employees of Uber SA.
The
commissioner's ruling
[57]
In her analysis of the evidence and argument in the proceedings under
review, the commissioner refers to the definition of
'employee' in s
213 and the test used to determine the existence of an employment
relationship. She records that the statutory
Code of Good Practice:
Who is an Employee? (the Code) establishes a 'new comprehensive
test', this being what she describes as
the 'reality of the
relationship test'. The nature and extent of that test is apparent
from the following extract from her award:
39) In so-doing,
several tests have been developed to indicate the existence or not of
an employment relationship. These include
the control test, the
organizational test, the economic dependence test and the dominant
impression test. In my view, the tests
used to distinguish between
employees and independent contractors have become largely
unhelpful, and in many
instances key aspects of the tests point to
employment, and others point to independent contracting.
40) No single
test is decisive, nor even consistently preferred by our courts,
although control or supervision have
repeatedly emerged as the most
helpful determinants. The Code of Good Practice: Who is an employee?
endorses the dominant impression
test. The Code identifies various
factors to be taken into account, and these factors are actually an
embodiment of the various
tests. Similarly, most of the factors in
section 200A embody the same tests, and the presence of any one
(along with earnings below
the threshold) triggers the presumption of
who is an employee in terms of the
Labour Relations Act. [In
this
matter, the parties agreed that the presumption did not apply to each
of the drivers and. as it is essentially a tool to determine
onus
rather than determinative of the relationship, the objection to the
CCMA's jurisdiction was heard first, followed by the answering
and
replying heads of argument.] The drivers accordingly bear the onus of
proving that they are employees for the purposes of the
LRA.
41)
Although not stated in so many words, the Code introduces a new
comprehensive test, which includes as factors
the past tests. This is
the "reality of the relationship" test. This requires that,
despite the form of the contract,
a person deciding whether someone
is an employee or an independent contractor must consider the real
relationship between the parties.
Item 52 states: "Courts,
tribunals and officials must determine whether a person is an
employee or independent contractor
based on the dominant impression
gained from considering au relevant factors that emerge from an
examination of the realities of
the parties' relationship."
[58]
The commissioner then proceeded to make a series of factual findings,
by reference to the factors listed in the Code and in
relation to
'Uber'. The commissioner found:
43) Drivers
render
personal services
. They must be on-boarded personally
with the necessary personal details, licenses and applications. They
drive in their own name
and may not out-source driving to someone
else. The relationship between Uber and the driver would terminate on
death of the driver.
44) The
relationship is
indefinite
as long as the driver complies with
requirements. For example, the driver is required to electronically
sign new policies and contracts
before she may drive. The
relationship is not dependent on achievement of a specific outcome.
45) Drivers
are subject to the control of Uber. Drivers choose their hours of
work and they may accept, decline or ignore
a list request. However,
Uber controls the manner in which they work by setting clear
standards and performance requirements, (such
as contained in the
Deactivation policy. Uber has control in that it may suspend and
deactivate access to the app, thereby depriving
the driver of the
opportunity to work and earn an income. Even though there is no
direct or physical supervision, control is exercised
through
technology, to the point that even the movement of the cell phone can
be detected, indicating reckless driving.
46)
Uber argued that partners
control
their drivers. To some
extent this is true because a driver cannot drive without a car and
the partner has control of the car and
the terms on which it is used
for driving. But Uber retains control over the particular performance
of each driver and it has the
ultimate power to deactivate a driver,
thereby depriving her of the opportunity to work and earn an income.
The Code identifies
at item 37 that: "A relevant factor would be
the extent to which the employer exercises control over a decision to
terminate
the services of persons engaged by the sub-contractor."
47) If
the driver does not meet the required standards, the driver is
effectively dismissed. Uber also argued
that each rider contracts
with each driver for each trip. This is a fiction and is not a
reflection of the real relationship between
the parties. Riders
choose Uber to provide them with a lift through one of its drivers.
The rider has no interest in or say over
which driver arrives. The
driver has no say over the fare and is not aware of the destination
until the rider is picked up. The
driver has minimal knowledge of the
rider's personal details and is prohibited from further contact in
terms of the service agreement.
48) These
factors indicate that the driver is by no means independent or
running her own transportation business. The
driver is very much at
the mercy of Uber, and
economically dependent
on the ability
to drive for Uber, an infinitely more powerful juristic person than
the individual drivers.
49)
Uber drivers are the essential part of Uber's service. The app is a
tool to request and provide lifts but
it is the drivers who provide
the riders with what they want. Riders want rides, not technology,
and app merely provides an extremely
convenient and accessible tool
for riders to get a lift and for drivers to provide one. As such,
drivers are an essential part
of the organisation which is Uber. If a
customer complains, the complaint goes to Uber.
[59]
This analysis conflates Uber SA and Uber BV and creates a reference
point described as 'Uber'. In the passages that follow,
from which
commissioner's reasoning is apparent, she discontinues her reference
to 'Uber' and proceeds to make findings specifically
in relation to
Uber SA:
50) The real
relationship between drivers in South Africa is that Uber SA is the
employer. Uber SA appoints them and
assists them to obtain the
necessary licenses. Uber SA approves the vehicle they will drive. The
relationship between drivers and
Uber BV is distant and completely
anonymized. Uber BV provides the legal contracts, the technology, the
collection and payment
of monies, but it is Uber SA, the subsidiary
and local company, that appoints, approves and controls drivers, and
Uber'. It is
at this point that drivers engage and occasionally
negotiate.
[59]
Finally, the commissioner rejects Uber SA's submission that the
drivers were employees of the partner whose vehicles they drove,
or
that they were independent contractors vis-a-vis the rider:
51) I reject
Uber's argument that the partner is the driver's employer, or that
the rider contracts the driver directly
as an independent service
provider. The partner or vehicle owner merely provides a vehicle for
a driver to drive and takes a fee
in return. This is akin to a lease
agreement, and examples of vehicles being leased to potential
drivers on
Gumtree demonstrate that
there is no employment relationship.
Furthermore, the
partner has no say over the driver's deactivation or
other controls implemented by Uber.
[60]
The commissioner's conclusions are recorded in the following terms:
(52) I am of the view
that in applying the Code of Good Practice, in particular the
realities of the relationship test, there is
sufficient basis for
finding that Uber drivers are employees of Uber SA. However, I accept
that certain factors indicate that drivers
are employees and others
indicate that they are not and I accept that the identity of the
employer is blurred. In the event that
I have adopted what appears to
be a broad or generous interpretation of section 213 of the LRA, I
believe this is justified by
the requirement to adopt an
interpretation which is in compliance with the Constitution and which
promotes social justice and effective
dispute resolution...
59) My conclusion is that
even though Uber BV provides the app and generates the contracts,
Uber SA is, for all intents and purposes,
Uber in South Africa. Uber
SA directs operations in the country and the city in question.
Insofar as Uber BV is the party that
concludes contracts with
drivers, it is anonymous and has no relevance for drivers.
The legal principles
applicable to the review of jurisdictional rulings
[61]
The legal principles to be applied in an application to review and
set aside a jurisdictional ruling made by a commissioner
are
well-established. Section 158 (1)
(g)
of the LRA provides that subject to s 145, this court may review the
performance of any function provided for in the LRA on
any grounds
that are permissible in law. In a review of
a jurisdictional ruling, the
applicable
threshold is not that of Reasonableness;[9]
the review court must determine whether or
not the commissioner's
decision is correct. In SA Rugby Players Association & others v
SA Rugby (Pty) Ltd & others (2008)
29 ILJ 2218 (LAC) the LAC said
the following:
[39]
The issue that was before the commissioner was whether there had been
a dismissal
or not. It is an issue that goes to the jurisdiction of
the CCMA. The significance of establishing whether there was a
dismissal
or not is to determine whether the CCMA had jurisdiction to
entertain the dispute. It follows that if there was no dismissal,
then,
the CCMA had no jurisdiction to entertain the dispute in terms
of s 191 of the Act.
[40]
The CCMA is a creature of statute and is not a court of law. As a
general rule, it
cannot decide its own jurisdiction. It can only make
a ruling for convenience. Whether it has jurisdiction or not in a
particular
matter is a matter to be decided by the Labour Court.
[62]
More recently, in Phaka v Commissioner Bracks
[2015] 5 BLLR 514
(LAC), the LAC confirmed that when the jurisdiction of an
arbitrator is in question (the case concerned a bargaining council
but the same holds for the CCMA), the issue is whether he or she
objectively had jurisdiction in law and fact - a finding that
the
arbitrator had jurisdiction because he or she might reasonably have
assumed as much 'is wholly untenable in principle'.[10]
[63]
The parties do not dispute the application of the 'correctness'
threshold. In other words, the question of the reasonableness
of the
commissioner's decision does not arise and in effect, the
commissioner's decision is of no real consequence. The court must
decide the jurisdictional issue de novo [11] on the basis of the
record filed in the review proceedings.
Evaluation
[64]
The only question to be determined on review is whether objectively,
on a conspectus of all of the relevant facts, the CCMA
had
jurisdiction to entertain the unfair dismissal disputes
referred by the drivers. The answer to
that question
depends, as the commissioner correctly recognised at the outset of
her ruling, on whether the drivers were 'employees'
of Uber SA.
[65]
I turn first to the legal principles that the commissioner was
obliged to apply. As I have noted, the test is well-established,
and
in broad terms, the parties are not in dispute about the relevant
principles. The starting point is s 213 of the LRA, which
defines an
employee in the following terms:
"employee"
means -
(a)
any person, excluding an independent contractor, who works for
another person or for the State and who
receives, or is entitled to
receive, any remuneration; and
(b)
any other person who in any manner assists in carrying on or
conducting the
business of an employer,
and "employed" and "employment" have meanings
corresponding to that of "employee".
[66]
Section 200 A of the LRA introduces a presumption in favour of
persons who work for or render services to any other person,
regardless of the forms of any contract between them, of the status
of 'employee', provided that one or more listed factors are
present.
In her ruling, the commissioner recorded that S 200A does not apply
in the present instance, and that part of her ruling
is not in
dispute in these proceedings.[12]
[67]
Both subparagraphs (a) and (b) of the definition of 'employee' have
been held to exclude independent contractors.[13]
Subparagraph (a) of the definition has been held to
apply to a person who works for another person in terms of
a common
law contract of employment. In other words, it is implicit that there
must be a contract between the person claiming to
be an 'employee'
and the person alleged to be the 'employer' and secondly, the
contract must be one of employment. Subparagraph
(b) is more
significant for present purposes, since the case made by the drivers
(at least in argument) is one that relies on that
subparagraph.
[68]
In Liberty Life Association of Africa Ltd v Niselow (1996) 17 ILJ 673
(LAC), Nugent J said the following of subparagraph
(b):
The latter part in
particular may seem to extend the concept of employment far beyond
what is commonly understood thereby. To adopt
a literal
interpretation though would clearly result in absurdity. I think that
the history of legislation which has culminated
in the present
statute, and the subject-matter of the statute itself, lends support
to a construction which confirms its operation
to those who place
their capacity to work at the disposal of others. which is the
essence of employment. It is not necessary in
this case to decide
where the limits of the definition lie. It is sufficient to say that
in my view the 'assistance' which is referred
to in the definition
contemplates that form of assistance which is rendered by an
employee, though the person he assists may not
necessarily be his
employer. In my view it does not extend to assistance of the kind
which is rendered by independent contractors.
That seems now to be
well accepted.[14]
[69]
The interpretation of subparagraph (b) is also canvassed in the Code.
The Code states that subparagraph (b) 'has the consequence
that
persons who are not engaged in terms of the contract of employment
may nevertheless be statutory employees.'
[70]
The LAC has held that it is a necessary precondition for a party to
establish the existence of a contractual relationship between
that
party and any putative employer, whether or not the benefit of the
presumption of employment under s 200A is claimed. In Universal
Church of the Kingdom of God v Myeni
[2015] 9 BLLR 918
(LAC), Ndlovu
JA said the following:
[49] In his pleadings, Mr
Myeni relied especially on the section 200A presumption, which I have
found did not apply in this case,
by reason of the fact that
there was neither an employment
contract nor
a contractual
working arrangement in place between Mr Myeni and the Church.
Nonetheless, even if I were to consider
the matter to the exclusion
of section 200A, it does not appear to me that I would have reached a
different conclusion. In other
words, even during the "pre-section
200A" era, the existence of an employment contract or
contractual working arrangement
was, in my view, still prerequisite
for the creation of an employment relationship. I am aware that this
was a rather contentious,
if not controversial issue, occasioned
particularly by the wording in the second leg of the definition of an
'employee' in section
213, which includes "any oth.er person who
in any manner assists in carrying on or conducting the business of an
employer".
[15]
[71]
Ndlovu JA went on the say, at paragraph 51 of the judgment:
Indeed, it appears to me
that, by its very nature, an employment relationship presupposes a
working arrangement of a contractual
nature between two or more
persons, in circumstances where the rights, duties and obligations
inter partes are legally enforceable.
Therefore, in the present
instance, even if Mr Myeni had not relied on s 200A, I would still
find that there was no legally enforceable
agreement between him and
the Church and that, for that reason, no employer and employee
relationship existed between them. There
was simply no contract that
could be classified as an employment contract on the evidence.
[72]
On this basis alone, given the concession by the drivers that there
was no contractual arrangement between them and Uber SA,
the
commissioner ought to have upheld Uber SA's jurisdictional challenge.
The commissioner was bound (as is this court) by judgments
of the
LAC. On the authority referred to above, the absence of any
contractual arrangement between the drivers and Uber SA was
fatal to
the drivers' claim to be employees of Uber SA. The commissioner thus
committed a material error of law, which in itself
warrants the
setting aside of her ruling.
[73]
On the assumption that I am wrong in coming to that conclusion and
that it remains open to the court to determine the existence
of any
employment relationship despite the absence of any contractual
arrangement between the drivers and Uber SA, the courts have
developed three major approaches over the years. These are the
supervision and control test, the organisation or integration test
(which is an enquiry into the extent to which a person claiming to be
an employee has been integrated into the organisation in
question)
and the dominant impression test, which requires a finding to be made
in accordance with the dominant impression of the
relationship,
taking into account all relevant factors.[16]
[74]
The dominant impression test, first applied in 1979 by what was then
the Appellate Division of the Supreme Court in Smit v
Workman's
Compensation Commissioner
1979 (1) SA 51
(A), has gained favour and
has been consistently followed by the High Court, the industrial
court, the Labour Court and the Labour
Appeal Court. More recently,
in State Information Technology Agency (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration
& others (2008) 29 ILJ
2234 (LAC), the LAC took a different view and held that when a court
determines the existence of an
employment relationship, it must have
regard to three primary criteria. These are an employer's right to
supervision and control,
whether the employee forms an integral part
of the organisation with the employer and the extent to which the
employee was economically
dependent on the employer.[17] In its
application of the this approach to the facts of the case, the LAC
made reference to what
it termed the 'reality' test, one which has
regard to the substance of the relationship, rather than its form.
The 'reality' test
had been previously referred to by the LAC in
Dene/ (Pty) Ltd v Gerber (2005) 26 ILJ 1256 (LAC), a case where a
legal entity in
the form of close corporation had been interposed
between what was ultimately found to be an employer and an employee.
[75]
Given the basis of the commissioner's ruling and her reliance on the
'reality test' that she discerns from the Code, it is
important for
present purposes to recognise that the root of what is referred as
the 'reality test' is no more than the assertion
that where parties
have concluded an agreement to structure the relationship between in
a particular form, that does not preclude
the court from enquiring
into the substance of the arrangement and to determine that despite
the terms of the contract,
an employment relationship
exists when one in fact exists. In other words, what the commissioner
referred to as the 'reality test'
is not a discrete test. It is no
more than a measure to be applied to combat disguised employment
relationships where contractual
arrangements between the parties
serve to conceal what is in truth an employment relationship, and
thus deprive an employee of
the statutory protection that is his or
her due.[18]
[76]
The Code, on which the commissioner places much store, does not
override the legal principles referred to above nor, as I have
said,
does it serve as a self standing source of interpretation of the
definition of 'employee.' Indeed, on the contrary,
the Code
acknowledges that the dominant impression test remains intact.[19]
The factors that the Appellate Division considered
relevant in that
case and which are recorded in the Code as constituting the hallmark
of a contract of employment are not definitive,
but include the
requirements that an employee must perform services personally, that
the employer may choose when to make use of
the services of an
employee, that the employee be obliged to perform lawful commands and
instructions of the employer, that the
contract terminates on the
death of the employee and that he contract also terminates on expiry
of the period of service stipulated
in the contract, as opposed to
the completion of work or the production of a specified result.
[77]
The test ultimately applied by the commissioner is not clear -
despite her reference to a 'new comprehensive test', the approach
she
applies bears close resemblance to the dominant impression test. To
the extent that the commissioner purported to adopt a 'generous
interpretation of section 213' and thus depart from binding
authority, she ought properly to have applied the interpretations of
s 213 by which she was bound.
[78]
What is apparent from all of the judgments of the LAC is that the
test to determine the existence of an employment relationship
ultimately remains a multi-factoral one. In terms of the prevailing
law, the 'realities of the relationship'
cannot be
reduced to a single, substantive test - a conspectus of all of the
relevant facts and circumstances is required, including
an
examination of the realities of the relationship where this is
warranted, typically in circumstances where contractual arrangements
are used to disguise those realities.
[79]
The legal principles that ought to have been applied aside, in any
event, it was not open to the commissioner, in her consideration
of
the facts before her, to disregard and the factual matrix in which
the nature, extent and significance of the material distinction
between Uber SA and Uber BV and their respective functions were
expounded in vast and largely undisputed detail.
[80]
Despite having dismissed an application to join Uber BV to the
proceedings, the commissioner proceeded to make a jurisdictional
finding oblivious to the material distinction drawn between Uber BV
and Uber SA. Indeed, a reading of the ruling indicates clearly
that
the commissioner conflated the two - references in both her factual
findings and conclusions are to 'Uber'. This, of course,
is what the
drivers had done in their answering affidavit - interchangeably
referred to Uber SA and Uber BV as 'Uber'. The commissioner
must have
been acutely aware that Uber SA and Uber BV are distinct legal
entities, and of the materiality of the distinction. She
must also
have been aware that what was in issue before was whether the drivers
were employees of Uber SA. She ought accordingly
to have approached
the determination of the facts on this basis.
[81]
In my view, for the reasons that follow, the facts that served before
the commissioner do not sustain the conclusion that the
drivers were
employees of Uber SA.
[82]
The drivers concede (as I have noted) that they have no contractual
relationship in any form with Uber SA, and that there are
no written
agreements as between them and Uber SA. It is not necessary therefore
for me to consider the various written instruments
that have are
referred to in the papers; they concern Uber BV. It is also not
necessary for me to consider whether those contracts
reflect the
reality of any relationship between Uber BV and the drivers - Uber BV
was not a party to the proceedings
under review
and it is not a party to
these proceedings.
Nonetheless, the drivers submit
that their relationship with Uber SA is one of employment. In
particular, they contend that Uber
SA holds itself out to be 'Uber'
in South Africa and that the nature of the engagement between them
and Uber SA amounts to an employment
relationship for the purposes of
South African law. In argument, the drivers point to some 12 factors
or indicators which in their
view, illustrate the manner in which
work is controlled through the Uber App and which constitute
activities of Uber SA, with the
consequence that Uber SA is their
employer.[20]
[83]
First, the drivers contend that Uber SA recruits, select and screens
drivers. The record of the proceedings under review suggests
the
contrary. The on-boarding process followed by drivers is described in
detail and recorded above. It entails establishing an
online profile
on Uber BV's website, uploading various documents under a driver
profile, attending a driving competency test conducted
by a third
party service provider, attending a two-hour information session at
Uber SA's offices and electronically conclud1ng
agreements with Uber
BV. But for minor exceptions not relevant to the present proceedings,
the drivers did not dispute to these
facts in the answering affidavit
and the commissioner was accordingly required to accept that Uber SA
does not recruit, select
or screen drivers.
[84]
Secondly, the drivers contend that Uber SA will only on-board a
driver who is authorised or licensed to use the Uber App through
the
licence agreement with Uber BV and that it necessarily follows both
that drivers must perform the services personally, and
that their
continued access to the Uber App is a precondition for the
continuation of work. This is broadly the conclusion to which
the
commissioner came at paragraph 43 of her award. The undisputed
evidence before the commissioner established that Uber SA does
not
on-board drivers. Rather, on boarding takes place consequent on
direct electronic communication between a prospective driver
and Uber
BV. There is no evidence to support the conclusion that any personal
services rendered by the drivers are rendered to
Uber SA. To
the extent that the drivers contend that Uber SA will only on-board a
driver who concludes the relevant
agreements with Uber BV, the
undisputed evidence before the commissioner was that Uber SA does not
on-board drivers. On the contrary,
it was common cause that
on-boarding takes place consequent on direct electronic communication
between the prospective driver and
Uber BV.
[85]
The drivers contend that Uber SA actively assists drivers to obtain
the necessary operating permits. At best for the drivers,
this is
misleading. The papers before the commissioner disclosed, as recorded
above, that the City of Cape Town's requirement for
a metered taxi
operating licence relates only to vehicle-owning partners, and not to
drivers. The documentary evidence before the
commissioner supported
this contention. While Uber SA acknowledged that it assisted the
vehicle owning partners with the formulation
and submission of
business plans and other documentation relevant to the securing of
the required licence, this has no application
to drivers and is by no
means an indication of any employment relationship between them and
Uber SA.
[86]
The drivers contend that Uber SA trains drivers in the use of the
Uber App. This is presumably a reference to the information
session
conducted by Uber SA. It is clear from the papers that this session,
which Uber SA does not dispute that it conducts, provides
no more
than a high-level overview of how to use the Uber App. In other
words, this is one of the support functions provided by
Uber SA to
Uber BV - it is not in itself any indication of any employment
relationship between Uber SA and the drivers. Again,
this is not a
version that the drivers specifically placed in dispute, and the
commissioner was obliged to accept it.
[87]
To the extent that the drivers' allege that Uber SA determines the
remuneration of drivers through the setting of fares, the
replying
affidavit before the commissioner makes clear that it is Uber BV and
not Uber SA that sets maximum fare rates. The same
applies to the
drivers' averments concerning price cuts and income guarantees where
reference was made only to 'Uber'. The replying
affidavit makes clear
that all of these averments pertained to Uber BV. It remains
undisputed that all matters regarding the collection
and payment of
fares pertained to the relationship between Uber BV and
vehicle-owning partners.
[88]
The drivers contend that Uber SA is the entity that pays the
partner-drivers. The facts before the commissioner were that Uber
BV
provides a digital payment facilitation feature as part of the
platform, that the technology provided by Uber BV calculates
and
collects fares from riders, computes and pays the amounts due to
partners at regular intervals, after deducting the fees due
to Uber
BV. That was not in dispute.
[89]
It is also common cause that Uber BV operates a local, non-resident
bank account in South Africa, under the name 'Uber BV South
Africa'
and that funds collected from riders' credit cards in South Africa
are transferred to that account. It was also not in
dispute that the
balance of the fare is transferred from Uber BV's account directly to
the partner's nominated bank account, and
that Uber SA does not make
any payment of any nature from its bank account to any partner or
driver. It was also not in dispute
that whatever arrangements
regarding payment were concluded between the partner and driver, this
ts of no concern to either Uber
SA or Uber BV. There is accordingly
no basis for the contention that Uber SA is the entity that pays
partner drivers.
[90]
To the extent that the drivers contend that the automated aspects of
the supervision and control exercised over the drivers
as mediated
through the Uber App are to be imputed to Uber SA and not what is
referred to as the 'software developer, Uber BV'
there is no factual
basis of this contention. The role of Uber BV was recorded in detail
in the founding affidavit before the commissioner,
and amplified in
the replying affidavit. It is manifestly not a role that is limited
to that of a software developer. In so far
as operational functions
are concerned, there is no factual basis to impute or ascribe any of
Uber BV's functions to Uber SA. To
the extent that the drivers
contend that Uber SA controls drivers through what was referred to as
the sub-Saharan deactivation
policy, this too is irreconcilable with
the undisputed facts that served before the commissioner. The drivers
did not allege, let
alone establish in the
answering affidavit filed by them that
the deactivation
policy emanated from Uber SA. In the founding
affidavit, Uber SA had pertinently recorded that the driver
deactivation policy was
distributed by Uber BV and that the rating
system and deactivation policy were devised and implemented by Uber
BV. The respondents
did not take issue with these averments and in
reply, Uber SA confirmed that the policy was drawn up and implemented
by Uber BV,
not Uber SA. To the extent then that the drivers assert
(and the commissioner found) that Uber SA retains control over the
performance
of each driver and retains ultimately the power to
deactivate a driver, this is not a conclusion that can be sustained
by reference
to the papers.
[91]
To the extent that the drivers contend that Uber SA offers
improvement training to poorly performing drivers and that it
disciplines
and dismisses them, this is not borne out by the record.
Again, the relevant documents, including the deactivation policy, are
issued by Uber BV and not Uber SA. It was also established in the
papers that served before the commissioner that while it is correct
that historically, Uber SA was authorised by Uber BV to deal with
rider complaints received against drivers in South Africa, since
2016
(well before the respective dates of deactivation of the drivers),
Uber BV had established its own incident response team,
based in
Ireland, to deal with rider complaints from South Africa and any
possible deactivation. It is clear that any decision
to deactivate
remains that of Uber BV, not Uber SA.
[92]
The papers that served before the commissioner establish that it has
throughout been common cause that Uber BV and not Uber
SA operates
the Uber App, that Uber BV and not Uber SA licences others (including
partners, drivers and riders) to use this technology,
that riders who
have agreed to accept Uber BV's standard contractual terms for riders
are connected by the Uber App to drivers
who have accepted Uber BV's
services agreement and have been authorised to have access to riders
via the App. It was also not in
dispute that drivers themselves may
be partners who have one or more vehicles registered with Uber BV,
alternatively they may be
employees driving for and on behalf of a
partner. It was also not seriously disputed that a driver-only pays
no fee to Uber BV,
that the fee is paid by the partner concerned and
that a driver never receives any payments from Uber BV, or from Uber
SA for that
matter. The remuneration of a driver is derived
exclusively from the partner concerned, in accordance with whatever
terms the partner
and driver may have agreed. There was evidence that
most, if not all, drivers-only employed by partners, sometimes in
terms of
written employment contract. At least some of the drivers
were or had been employed in terms of written agreements by the
vehicle
owning partners with whom they contracted. Examples of
employment contracts entered into with partners were provided in
respect
of the fifth and sixth respondents, together with their
payslips.
[93]
It was also not in dispute that none of the drivers, whether
partner-drivers or drivers-only, are ever under any obligation
to
Uber SA to use the Uber App, or ever under any obligation to drive an
Uber BV registered vehicle. Further, it was not seriously
disputed
that Uber SA had any right to instruct or require either category of
driver to drive at any particular time, or to dictate
where they are
to drive, or which passengers they are to transport.
[94]
The objection to the drivers' (and the commissioner's) conflation of
Uber SA and Uber BV is not merely technical. The consequence
of the
drivers' election in their answering affidavit not to distinguish
between Uber SA and Uber BV was that there was no dispute
of fact
before the commissioner regarding the delineation of function between
Uber SA and Uber BV, as pleaded by Uber SA. It was
not for the
commissioner to disregard those facts.
[95]
It is not enough to assert, as the drivers do, that 'Uber' is a valid
designation for a well-known brand with a global presence,
or that
Uber SA holds itself out as Uber or that the same legal team
represented, at various stages of the proceedings in the CCMA,
both
Uber SA and Uber BV. The fact remains that the drivers and their
representatives at the time were fully aware as early as
9 September
2016, when Uber SA filed its application for a declaratory order to
the effect that the CCMA lacked jurisdiction to
entertain the unfair
dismissal dispute, of the assertion that the parties to any
contractual relationship that existed were the
drivers and Uber BV,
and that the drivers were independent contractors of Uber BV. This is
the case that should have
been met.
Instead, the drivers filed an
answering affidavit characterised
by polemic rather than
fact. If there was any doubt about the significance of the respective
roles and functions of Uber BV and
Uber SA, these ought to have been
dispelled by the time the replying affidavit was filed. There was no
challenge to Uber SA's averments
of fact in that affidavit.
[96]
There is no explanation in the papers before me as to why the drivers
at that stage (or at least at the point when their application
to
join Uber BV was dismissed) did not withdraw their referral and seek
to refer a fresh dispute against Uber BV and/or Uber SA,
or any of
the parties with whom they had concluded an employment contract.
[97]
In summary, in relation to the facts that served before the
commissioner, the commissioner erred by failing to distinguish
between Uber SA and Uber BV as discrete legal entities. There was no
dispute of fact before the commissioner regarding the delineation
of
functions as between Uber SA and Uber BV. Each of the building blocks
of the drivers' case pertains to Uber BV and not Uber
SA Given the
nature of the enquiry before her, and in particular, the undisputed
facts before disclosed on the affidavits, the
commissioner was
obliged to consider the respective roles of Uber BV and Uber SA in
relation to the drivers. She failed to embark
on this enquiry and, as
I have recorded, simply conflated the two entities. Had the
commissioner maintained the critical distinction
between Uber BV and
Uber SA and considered (as she was obliged to do), only whether the
drivers were employees of Uber SA, she
would have come to the
conclusion that on the drivers' own version, they had failed to
discharge the onus they bore to establish
the existence of an
employment relationship with Uber SA
[98]
Finally, it warrants mention (and emphasis) that this judgment does
no more than conclude that on the facts, the drivers were
not
employees of Uber SA, and that they therefore have no right to refer
an unfair dismissal dispute to the CCMA as against Uber
SA Whether
the drivers are employees of Uber BV (either alone or in a
co-employment relationship with another or other parties),
or whether
they are independent contractors of Uber BV, is a
matter that remains for
decision on another
day. It was not the question before the commissioner, and it is not
the question before this court.
Remedy
[99]
In review applications, should a commissioner's decision be reviewed
and set aside, this court ordinarily exercises a discretion
to either
remit the matter to the CCMA for rehearing, or substitute the
commissioner's finding. The source of this discretion is
s 145 (4) of
the LRA, which provides that this court may either 'determine the
dispute in the manner it considers appropriate'
or 'make any order it
considers appropriate about the procedures to be followed to
determine the dispute. Although this proviso
relates specifically to
reviews under s 145, the court has held that it is applicable to
reviews such as the present, brought under
s 158 (1) (g).[21] The
court ordinarily takes into account whether the result is a foregone
conclusion, whether any prejudice would
be caused to the applicant by
any further delay, whether the decision-maker has exhibited bias, and
whether the court is in as
good a position to make the decision
itself. In Palluci Home Depot (Pty) ltd Heskowitz and others
[2015] 5
BLLR 484
(LAC) the LAC said the following, at paragraph 58:
Where all the facts
required to make a determination on the disputed issues before a
reviewing court in an unfair dismissal or unfair
labour practice
dispute such that the court is in as good a position as the
administrative tribunal to make the determination,
see no reason why
a reviewing court should not decide the matter itself. Such an
approach is consistent with the paths of the Labour
Court under s 158
of the LRA, which primarily directed at remedying a wrong, and
providing effective and speedy resolution of disputes.
The need for
bringing a speedy finality to labour dispute is thus an important
consideration in the determination, by a court of
review, of whether
to remit the matter to the CCMA for reconsideration, or substitute
its own decision for that of the commissioner.[22]
[100]
The drivers submit that if the commissioner's ruling is set aside,
the matter should be remitted since a 'new decision' can
only be
taken in the light of full and certain facts, many of which emerged
shortly before the hearing of the present application.
In particular,
the drivers refer to the substitution during the pre-arbitration
processes in the CCMA of Uber BV for Uber SA, and
uncertainty as to
whether Uber BV is a party to the dispute at least in respect of some
of the drivers. Further, the drivers submit
that it would be in the
interests of justice to do so, because Uber SA 'cited itself' as the
respondent after Uber BV 'reconsidered
its initial decision to offer
itself as the alleged employer party', and that Uber BV and Uber SA
failed to bring this material
history to the attention of the
commissioner. They also allege that Uber SA failed to place all
relevant documentation before the
commissioner and that there may
have been abuse of separate juristic personalities. There is no merit
in these submissions. The
papers do not disclose any impropriety on
the part of Uber SA, Uber BV or their representatives. There is no
basis for the insinuation
that Uber SA and its representatives acted
del1berately to obfuscate the issues (especially the identity of the
employer) and conceal
documents. The drivers find themselves in the
position they do largely on account of the manner in which they and
their representative
at the time conducted the proceedings in the
CCMA, prior to the appointment of their legal representatives. In any
event, as I
have noted above, for so long as the commissioner's
ruling dismissing the application to join Uber BV to the arbitration
proceedings
stands, it is not open to the court to interfere, whether
by issuing directives on Uber BV's joinder or otherwise.
[101]
While it might appear to the drivers that this application ultimately
turns on a technicality, it is a technicality which
given the history
of this dispute is of some significance and of which their
representatives at the time were fully aware. The
fact that those
representatives (and I refer specifically to SATAWU) conducted the
matter in the way they did has materially contributed
to the present
outcome.
[102]
The court has before it all of the material to be in as good a
position as another commissioner to make the correct determination.
Little point would be served by remitting the dispute for
reconsideration. Further, the interests of expeditious dispute
resolution
would be best served by an order of substitution.
Costs
[103]
Finally, in relation to costs, this court has a broad discretion in
terms of s 162 to make orders for costs according to the
requirements
of the law and fairness. In my view, both interests are best served
by there being no order as to costs. This court
has conventionally
been reluctant to make orders for costs where genuinely aggrieved
employees pursue legitimately felt grievances.
There is no good
reason to make an exception in this instance.
I
make the following order:
1. The
application to strike out paragraphs 20 and 21 of the answering
affidavit and annexure OP3 thereto is granted.
2. The
application to join Uber BV to the application is dismissed.
3. The in
limine ruling made by the twelfth respondent on 7 July 2017 under
case number WECT 12537-16 and including
case numbers WECT 102875-16,
WECT 14948-16, WECT 875- 17, WECT 1503-17, WECT 12614 - 16, is
reviewed and set aside.
4. The
twelfth respondent's ruling is substituted by the following:
'1.
The respondent's objection to the jurisdiction of the CCMA is upheld.
2.
The applicants' referrals are dismissed'.
Andre
van Niekerk
Judge
REPRESENTATION
For
the applicant: Adv. A Freund SC, with him Adv. G Leslie, instructed
by Cliff Dekker Hofmeyr
For
the respondents: Adv. S Harvey, instructed by Bradley Conradie
Halton Cheadle
[1]
So called on account of the model in which those providing services
(in the present case, a car journey) receive payment for
each 'gig'
or job performed on a freelance or short-term basis, usually
structured so as to exclude any employment relationship
or at least,
any notion of permanent employment.
[2]
The court was referred to a
host of rulings and judgments
by
arbitrators and courts in other
jurisdictions. For interest, see Viacab v
Societe
Uber International BV (Tribune de Commerce de
Paris, 15eme Chambre, 30 January 2017,
Alatraqchi v Uber
technologies Inc
(11-42020 CT, 2
August 2012, Mc
Gillis v Rasier LLC (Dept. of Economic Opportunity, Florida,
3 December
2015, Mc Gillis v
Dept. of Economic Opportunity (Third
District Court of Appeal,
1 February 2017, YE v
Uber Technologies Inc. (ADRS Case no.
15-6878 MOM,
23 November 2016, Agblevon v Uber Technologies Inc
(Georgia Dept. of Labor 11 September 2014, Mohammed v Uber
Technologies Inc.
(Illinois Dept. of Human Rights 29 November 2015,
Lowman v Uber Technologies Inc. (Dept. of Labor
and Industry
Pennsylvania 12 February 2016,
Uber BV & others v Aslam & others
(unreported,
Appeal No UKEAT/0056/17/DA, 10 November 2017). For
reasons that will become apparent, it
is not necessary for me to
consider any of these authorities.
[3]
See South African Maritime Safety Authority
v Mc Kenzie 2010 (3) SA 601 (SCA).
[4]
See paragraph [77] below.
[5]
At paragraphs [32] and [40].
[6]
This much is apparent, for example, from the consolidation ruling
made by commissioner Isaacs on 18 August 2016, in respect
of the
dispute referred by the second respondent (SATAWU), acting on behalf
of the third respondent, Morekure. She records that
a conciliation
hearing was held on 17 August 2016 at which the union
and Uber SA were represented.
All
of the interlocutory applications in
the matters respectively referred by
the drivers
reflected Uber SA as the employer party. In particular, in an
application before commissioner Carlton on 22 September
2016 to have
the dispute referred to this court, the applicant was clearly cited
as Uber SA and the ruling made on that basis.
[7]
There are additional issues raised in the affidavit relating to the
invalid set down of the arbitration hearing,
the
governing law of the contract and an ouster
(arbitration) clause, none of which are
materially relevant to the present proceedings.
[8]
Given that Uber BV was not a party to the proceedings under review,
it is not necessary to determine whether Uber BV is in
the business
of supplying transportation services, or whether it acts as the
agent of the drivers, or whether it does no more
than provide a
technological platform for use by drivers and riders.
[9]
Sidumo & another v Rustenburg Platinum Mines Ltd & others
[2007] 12 BLLR 1097
(CC) and amongst others, Goldfields Mining SA
(Pty) Ltd v CCMA & others {2014]
[2007] ZALC 66
;
1 BLLR 20
(LAC)).
[10]
At paragraph [29]. As the LAC observed, the standard of review
enunciated in Sidumo and another v Rustenburg Platinum Mines
Ltd and
others
2008 (2) SA 24
(CC), that of the reasonable decision-maker,
applies only to the review of determinations of the fairness of a
dismissal or labour
practice.
[11]
See Myburgh and Bosch Reviews in the Labour Court at 114-115.
[12]
In any event, the LAC has recently held that the presence of a
contract between the alleged employee and employer is a sine
qua non
for the presumption in s 200A to apply. It is not in dispute in the
present proceedings that there is no contract of
any nature between
the drivers and Uber SA. See Universal Church of the Kingdom of God
v Myeni
[2015] 9 BLLR 918
(LAC).
[13]
See Liberty Life Association of Africa Ltd v Niselow (1996) 17 ILJ
673 (LAC), SA Broadcasting Corporation v McKenzie (1999)
20 ILJ 585
(LAC)., Borcherds v CW Pearce & J Sheward t/a Lubrite
Distributors (1993) 14 ILJ 1262 (LAC)
[14]
At 683 A-B.
[15]
At paragraph [49] of the judgment.
[16]
See SA Broadcasting Corporation v McKenzie (1999) 20 ILJ 585 (LAC)
at paragraph [8].
[17]
At paragraph 12.
[18]
See ILO Recommendation Employment Relationship Recommendation (No
198) 2006.
[19]
See paragraph 35 of the Code.
[20]
This is not the case made out in the answering affidavit filed by
the drivers in the CCMA. As I have noted, their case then
was simply
to conflate Uber BV and Uber SA and contend that 'Uber' was their
employer.
[21]
See Myburgh and Bosch Reviews in the Labour Court (Lexis Nexis) 2016
at 451-2 and the authorities referred to in fn 157.
[22]
See Myburgh and Bosch (supra) at 452.